ISO 2021 GMC Update Using 2019 COSS DRAFT V2 · Table 5 — Level 1 ABC Activities ABC Process Code...

California ISO

2019 Cost of Service Study and

2021 GMC Update

DRAFT

June 2020

Finance/FPP of 67

Table of Contents

Executive Summary ..................................................................................................................... 3

Application of ABC to GMC and RC Rate Structure ................................................................... 6

Costing the 2019 GMC Revenue Requirement ..................................................................... 16

Step 1: Breaking Out Non-ABC Support Costs .................................................................. 17

Step 2: Allocation of O&M Costs ........................................................................................... 18

Step 3: Allocating Remaining Revenue Requirement Components to Cost Categories34

Step 4: Aggregating Revenue Requirement into Cost Categories .................................. 35

Step 5: Calculation of 2019 Rates Using New Cost Category Percentages ................... 36

Summary of GMC Cost Category Percentage Changes ..................................................... 38

Energy Imbalance Market .......................................................................................................... 39

Application of ABC to EIM Rate Structure ............................................................................ 39

Mapping of Cost Categories to EIM Activities ...................................................................... 39

Costing the Cost Categories to EIM Activities ..................................................................... 48

Step 1: Applying EIM Activity Percentages to Non-ABC O&M Support Costs .............. 49

Step 2: Applying EIM Activity Percentages to ABC Direct O&M Costs ........................... 50

Step 3: Allocating the Remaining Revenue Requirement Components ......................... 55

Step 4: Aggregating Revenue Requirement into Cost Categories and Allocating Fees55

Step 5: Calculation of the EIM Components of the 2019 Cost Category Rates.............. 56

Summary of EIM Cost Category Percentage Changes ....................................................... 57

Reliability Coordinator Services ................................................................................................ 58

Supplemental Fees ..................................................................................................................... 61

Transmission Ownership Rights ............................................................................................... 62

Application of ABC to TOR Fee Structure ............................................................................ 62

Mapping and Costing of Cost Categories to TOR Activities .............................................. 63

Summary of TOR Fee Changes .............................................................................................. 66

Application Fees ......................................................................................................................... 66

Scheduling Coordinator ID Administrative Fee ........................................................................ 67

Finance/FPP of 67

Executive Summary

The CAISO completed its scheduled triennial cost of service study (2019 cost of service study) in

accordance with its Tariff (Appendix F, Schedule 1). The study analyzes cost and time data to determine how

much time and effort staff uses to support varying cost categories and supplemental services. CAISO uses study

results to update the GMC revenue requirement percentage allocations to the market services, system

operations, and congestion revenue rights services (CRR services) cost categories (outlined in Table 1). The

study results are also used to update the energy imbalance market (EIM) cost category percentages (outlined in

Table 2) and the recently developed, the reliability coordinator (RC) funding percentage (outlined in Table 3). In

addition, as part of the 2019 cost of service study, the CAISO analyzed its cost to support supplemental services

(outlined in Table 4). The resulting percentage allocation changes and fee changes will be effective for the 2021

through 2023 GMC revenue requirement and grid management charges (GMC).

Table 1 – Summary of GMC Cost Category Percentage Changes

The 2019 cost of service study results indicate a 17% shift of resources (time and dollars) from the

system operations cost category to the market services cost category; the CRR service cost category percentage

remains the same. The shift from system operations to market services is primarily driven by the efficiencies

accomplished in supporting system operations functions. Due to automation of services, system improvements,

and process efficiencies, CAISO staff is focused on supporting market services and system operations functions

equally.

Cost

Category

2016 Study

Effective

2018 GMC

2019 Study

Effective

2021 GMC

Increase /

(Decrease)

from Prior

Market Services 32% 49% 17%

System Operations 66% 49% ‐17%

CRR Services 2% 2% 0%

Finance/FPP of 67

Table 2 – Summary of EIM Cost Category Percentage Changes

The results also indicate a shift of EIM related resources as well, shown highlighted in Table 2. The study

shows that 16% of market services’ resources shifted from the real time market functions to day ahead market

functions. In addition, 11% of system operations’ resources shifted from balancing authority functions to real time

dispatch functions. The driver of the shifts is a balancing of efforts between the market services and system

operations functions and responsibilities.

Table 3 – Summary of RC Funding Percentage Changes

New to the triennial cost of service study is the analysis of RC services efforts. CAISO implemented its

RC services in 2019. The study results indicate there is no change in the RC funding percentage from that of the

initial calculation as part of CAISO’s Reliability Coordinator Rate Design, Terms and Conditions proposal1; the

funding percentage will remain at 9%.

1 Visit the CAISO website for additional information regarding the Reliability Coordinator Rate Design, Terms and Conditions proposal.

Cost

Category

2016 Modified

Study

Effective

2019 GMC

2019 Study

Effective

2021 GMC

Increase /

(Decrease)

from Prior

Reliability Coordinator Services 9% 9% 0%

Cost

Category Sub‐Category

2016 Study

Effective

2018 GMC

2019 Study

Effective

2021 GMC

Increase /

(Decrease)

from Prior

Real Time Market 79% 63% ‐16%

Day Ahead Market 21% 37% 16%

Real Time Dispatch 39% 50% 11%

Balancing Authority 61% 50% ‐11%

Market Services

System Operations

Finance/FPP of 67

Table 4 – Summary of Supplemental Fee Changes

CAISO also used the 2019 cost of service study to analyze efforts that support other supplemental

services. The study results indicate resources to process applications and statements increased. Whereas,

resources to support transmission ownership rights (TOR) efforts decreased. CAISO is proposing changes to the

Scheduling Coordinator ID fee, TOR fee, Scheduling Coordinator Application fee, and CRR Application fee based

on the study. The revenue collected from the fees offset the costs recovered through either the GMC revenue

requirement or the GMC rates. The CAISO is not proposing any other change in supplemental fees.

Other Tariff Amendments

Additionally, CAISO seeks to clarify in the Tariff the administrative process around the self-insured

healthcare reserve. In 2018, CAISO converted a portion of its healthcare benefit program to a self-insured model.

The intent of the program was to help CAISO and its employees mitigate the effects of rising healthcare costs. A

self-insured health insurance program shifts the financial risk of paying health insurance claims to the employer

versus the health insurance company. The benefits to the employer include more control over the design of the

health insurance plan and saving the profit margin that insurance companies add to their premiums.

CAISO works with a health benefit consultant annually to determine the appropriate amount of premiums

to assess the users of the plan given expected claims data. The original intent of the self-insured program was to

enable the CAISO to be able to build a reserve in years in which actual claims were less than expected and to

Fee Billing Units Current Fee Updated Fee

Bid Segment Fee per bid segment $ 0.0050 No Change

Inter SC Trade Fee per Inter SC Trade $ 1.0000 No Change

Scheduling Coordinator ID Fee per month $ 1,000 1,500$

TOR Fees

minimum of supply

or demand TOR

MWh $ 0.2400 $ 0.1800

CRR Bid Fee

number of

nominations and

bids $ 1.00 No Change

Intermittent Resource Forecasting Fee per MWh 0.1000$ No Change

Scheduling Coordinator Application Fee per application 5,000$ 7,500$

CRR Application Fee per application 1,000$ 5,000$

HANA Administrative Fee annual fee 45,000$ No Change

HANA Setup Fee one time fee 35,000$ No Change

Finance/FPP of 67

use those reserves in years in which claims exceeded expectations. This would smooth out the volatility

associated with healthcare claims.

It is not clear in the existing tariff whether CAISO is able to hold back the reserve from the operating cost

reserve adjustment that is performed each year to fund the self-insured healthcare reserve. The operating cost

reserve adjustment ensures that any excess or shortfall in any category that makes up the revenue requirement is

accounted for in the annual rate development. Although the CAISO originally believed that the healthcare reserve

could be established using the existing budgeting processes, the effect on the Tariff operating cost reserve

adjustment process is not clear and therefore, CAISO will add specific language describing the annual healthcare

reserve process.

Application of ABC to GMC and RC Rate Structure

The CAISO used activity based costing (ABC) for the first cost of service study to restructure the GMC

rate design in 2011. The GMC design was vetted through a comprehensive stakeholder process. The design

was approved by the CAISO Board of Governors and the Federal Energy Regulatory Commission (FERC) in

2011 and became effective on January 1, 2012.

Activity based costing allows the CAISO to analyze the cost to provide services using budget, processes

and time data. The analysis provides a comprehensive understanding of how much effort (time and resources)

are contributing to each of the service cost categories. This method guides the CAISO to allocate the right portion

of its annual revenue requirement to the GMC and other rates.

The GMC rate structure contains three cost categories: market services, system operations and CRR

services. The market services category is designed to recover costs CAISO incurs for running the markets. The

system operations category is designed to recover costs CAISO incurs for reliably operating the grid in real time.

The CRR services category recovers costs CAISO incurs for running the CRR markets. The CAISO uses the cost

of service study to determine the share of the CAISO’s direct and indirect costs attributable to these three cost

categories. The CAISO applies the percentages calculated as part of the cost of service study to the annual GMC

revenue requirement to determine the amount in the cost categories upon which rates are set.

Finance/FPP of 67

Within the market services and system operations cost categories, activity based costing also allows for

the further delineation of resources to determine the appropriate percentage of GMC that EIM entities pay.

Market services is bifurcated between real time market resources and day ahead market resources. While,

system operations is split between real time dispatch resources and balancing area authority services. EIM

entities pay the percentage of GMC associated with real time market and real time dispatch resources.

The 2019 cost of service study includes a new cost category, reliability coordinator, to calculate the RC

funding percentage. The RC funding percentage represents the direct and indirect time and expense necessary

for the CAISO to perform its RC services and functions. The RC funding percentage is used similarly to the GMC

cost category percentages in that the RC funding percentage is multiplied against the revenue requirement to

determine the RC funding requirement. This approach allows the RC funding requirement to leverage against the

stability of CAISO’s annual revenue requirement thus benefiting both the RC customers and the existing GMC

customers.

Mapping of ISO Core Business Processes

Finance/FPP of 67

Currently, the ABC analysis has disaggregated CAISO functions into nine core processes (level 1

activities). Each of the core activities were further broken down into major processes (level 2 activities) which

were then mapped back to the level one activity. There are 107 level 2 activities included in the 2019 cost of

service study.

CAISO continually reviews and develops its processes to reflect its current state of operations and

process flows. The level 2 processes discussed in this study were mapped and defined as of March 2020. The

level 1 activities were categorized into two types: (1) direct operating costs — those that can be directly mapped

to a market, grid service, customer, or reliability service; and (2) support or indirect costs — those that support the

direct activity.

Table 5 — Level 1 ABC Activities

ABC

Process

Code Level 1 ABC Activity

Number of

Level 2

Activity Tasks

Direct

80001 Develop Infrastructure 10

80002 Develop Markets 9

80004 Manage Market & Reliability Data & Modeling 10

80005 Manage Market & Grid 6

80007 Manage Operations Support & Settlements 12

80008 Plan & Manage Business 12

80009 Support Business Services 34

80010 Support Customers & Stakeholders 6

Total 99

Indirect

80003 Manage Human Capabilities 8

9 Total 107

Finance/FPP of 67

MAPPING OF ABC DIRECT OPERATING ACTIVITIES

Direct operating activities were defined, linked to specific processes, and measured using the 12 standard

percentage allocations presented below.

Table 6 — Mapping of ABC Direct Operating Activities to Cost Categories

Option 1 2 3 4

1 100%

2 95% 5%

3 80% 20%

4 80% 15% 5%

5 80% 10% 5% 5%

6 60% 40%

7 60% 35% 5%

8 60% 30% 5% 5%

9 50% 50%

10 50% 40% 10%

11 45% 45% 5% 5%

12 40% 40% 20%

Standard Cost Category Percentage Allocations

Finance/FPP of 67

2019 Modified Revenue Requirement: ABC Direct Operating Activities

Code ABC Level 2 Activities

Market

Services

System

Operations

CRR

Services

Reliability

Coordinator Indirect Comments

80001 Develop Infrastructure (DI)

201 Develop and Monitor Regulatory Contract Procedures 95% 5%

Efforts primarily support market services functions; as well as RC

services functions on a smaller scale.

202 Manage Generator Interconnection Agreements 100%

Efforts related to managing the building and maintaining of the

grid thus the costs are entirely to support system operations.

203 Manage Generator Interconnection Process 100%



204 Manage Long Term Transmission Planning 100%



205 Manage New Transmission Resources 95% 5%

Efforts primarily support system operations functions; as well as

RC services functions on a smaller scale.

206 Manage Transmission Maintenance Standards 100%



207 Manage Load Resource Data 100%



208 Seasonal Assessment 100%



209 Manage Queue Management 100%



210 Manage Annual Delivery Assessment 100%



80002 Develop Markets (DM)

226 Manage Regulatory Filings 100% Attributes are not distinguishable to any specific category.

227 Manage Tariff Amendments 100% Attributes are not distinguishable to any specific category.

228 Manage Post Order, Rehearing, and Compliance 100% Attributes are not distinguishable to any specific category.

229 Develop State / Federal Regulatory Policy 40% 60%

Efforts predominately support system operations functions; as

well as those of market services on a smaller scale.

230 BPM Change Management 80% 10% 5% 5%

Efforts predominately support market services functions; as well

as those of system operations, CRR services, and RC services on a

smaller scale.

231 Develop Infrastructure Policy 40% 60%


well as those of market services on a smaller scale.

232 Perform Market Analysis 80% 15% 5%


as those of system operations and RC services on a smaller scale.

233 Develop Market Design 100% Efforts are entirely to support the market results and function.

234 Manage Regulatory Contract Negotiations 95% 5%

Efforts primarily support system operations functions and RC

service functions on a smaller scale.

80004 Manage Market & Reliability Data & Modeling (MMR)

301 Manage Full Network Model Maintenance 45% 45% 5% 5%

Efforts primarily support market services and system operations

functions equally, as well as those of RC services and CRR services

on a smaller scale.

302 Plan & Develop Operations Simulator Training 95% 5%



304 EMAA Telemetry 50% 50%

Efforts support market services and system operations functions

equally.

307 Manage Congestion Revenue Rights 100% Efforts support CRR services functions entirely.

308 Manage Credit & Collateral 40% 40% 20%


functions equally, as well as those of CRR services on a smaller

scale.

309 Resource Management 50% 50%

Efforts support market services and system operations functions

equally.

310 Manage Reliability Requirements 100%

Efforts relate to actual system operations functions thus the

costs are entirely to support system operations.

311 Manage Operations Planning 95% 5%



312 Manage WECC Studies 100%

Efforts relate to actual system operations functions thus the

costs are entirely to support system operations.

314 Manage & Facilitate Procedure Maintenance 95% 5%



316 Plan & Develop Operations Training 95% 5%



317 Execute & Track Operations Training 95% 5%



320 Provide Stakeholder Training 60% 30% 5% 5%

Efforts support all category functions; primarily those of market

services and system operations.

321 Schedule Coordinator Management 45% 45% 5% 5%


functions equally; as well as those of RC services and CRR services

on a smaller scale.

322 Register, Modify and Terminate PDR Resource 100% Efforts are entirely to support the market results and function.

323 Calculate & Monitor Energy Costs & Indices 60% 35% 5%


functions; as well as RC services on a smaller scale.

cost category % allocation

GMC

Finance/FPP of 67



Market

Services

System

Operations

CRR

Services

Reliability


80005 Manage Market & Grid (MMG)

352 Manage Day Ahead Market Support 95% 5%

Efforts primarily support market service functions; as well as RC


353 Operations Real Time Support 80% 15% 5%

Efforts predominately support market service functions; as well

as those of system operations and RC services functions on a

smaller scale.

355 Outage Model & Management 5% 60% 35%


well as those of RC services and market services on a smaller

scale.

360 Real Time Operations 20% 80%


well as market services functions on a smaller scale.

362 Manage Operations Engineering Support 15% 80% 5%


well as those of market services and RC services functions on a

smaller scale.

367 Manage Operations Compliance & Event Analysis 50% 50%

Efforts support system operations and RC services functions

equally.

368 Manage Day Ahead and Market Operations 100% Efforts support market services functions entirely.

370 Manage Real Time Reliability Coordination 100% Efforts support RC services functions entirely.

80007 Manage Operations Support & Settlements (MOS)

401 Perform Market Validation 80% 20%


as those of system operations functions on a smaller scale.

402 Manage Dispute Analysis & Resolution 100%

Efforts are entirely to support the market services results and

functions.

403 Manage Market Quality System 50% 40% 10%


as those of system operations and CRR services on a smaller

scale.

406 Manage Rules of Conduct 100% Attributes are not distinguishable to any specific category.

409 Meter Data Acquisition and Processing 100% Efforts support market services functions entirely.

411 Manage Market Clearing 45% 45% 5% 5%



on a smaller scale.

412 Manage Market Billing & Settlements 45% 45% 5% 5%



on a smaller scale.

413 Manage Reliability Must Run Settlements 100%

Efforts support reliability on the grid thus the costs are entirely

to support system operations functions.

414 Manage Settlements Quarterly Release Cycle 45% 45% 5% 5%



on a smaller scale.

417 Perform Market Report 80% 20%


as those of system operations functions on a smaller scale.

418 Manage Good Faith Negotiation Requests 100% Efforts support market services functions entirely.

419 Manage Price Corrections 50% 40% 10%


as those of system operations and CRR services on a smaller

scale.

80008 Plan & Manage Business (PMB)

451 Manage Financial Planning 100% Attributes are not distinguishable to any specific category.

452 Manage Application, Environment & Infrastructure 100% Attributes are not distinguishable to any specific category.

453 Manage Resource Allocation 100% Attributes are not distinguishable to any specific category.

454 Project Portfolio Management 100% Attributes are not distinguishable to any specific category.

455 Manage Technology Collaboration (Internal) 100% Efforts support market services functions entirely.

457 Manage Annual Functional Release Lifecycle 100% Attributes are not distinguishable to any specific category.

459 Enterprise Risk Management 100% Attributes are not distinguishable to any specific category.

461 Perform Board Processes 100% Attributes are not distinguishable to any specific category.

462 Manage Technology Collaboration (External) 100% Efforts support market services functions entirely.

466 Manage Corporate Goal Alignment and Reporting 100% Attributes are not distinguishable to any specific category.

467 Research & Proof of Concept 100% Attributes are not distinguishable to any specific category.

469 Manage Project & Effort Lifecycles 100% Attributes are not distinguishable to any specific category.


GMC

Finance/FPP of 67



Market

Services

System

Operations

CRR

Services

Reliability


80009 Support Business Services (SBS)

501 Manage Monthly Financial Cycle 100% Attributes are not distinguishable to any specific category.

502 Invest Corporate Funds 100% Attributes are not distinguishable to any specific category.

503 Manage Financial Reporting 100% Attributes are not distinguishable to any specific category.

504 IT Application, System, & Non‐Production Support 80% 15% 5%


as those of system operations and RC services on a smaller scale.

505 IT Asset Management 100% Attributes are not distinguishable to any specific category.

508 IT Configuration, Change & Release Management 100% Attributes are not distinguishable to any specific category.

510 IT Event Management 100% Attributes are not distinguishable to any specific category.

511 IT Incident Management 60% 30% 5% 5%



smaller scale.

512 IT Information Security Management 100% Attributes are not distinguishable to any specific category.

513 IT Problem & Risk Lifecycle Management 60% 30% 5% 5%



smaller scale.

519 Provision and Manage Access 100% Attributes are not distinguishable to any specific category.

520 Manage Facilities, Physical Security, & Safety 100% Attributes are not distinguishable to any specific category.

521 Facilities Incident Management 100% Attributes are not distinguishable to any specific category.

522 Corporate Incident Response & Disaster Recovery 100% Attributes are not distinguishable to any specific category.

523 Manage Business Continuity Plan 100% Attributes are not distinguishable to any specific category.

528 Procurement & Vendor Management 100% Attributes are not distinguishable to any specific category.

529 Provide Legal Advice 100% Attributes are not distinguishable to any specific category.

530 Manage Dispute Resolution 100% Attributes are not distinguishable to any specific category.

533 Manage Evidence Review / Audit 100% Attributes are not distinguishable to any specific category.

535 Tariff Controls Monitoring 100% Attributes are not distinguishable to any specific category.

536 Manage Internal Audit 100% Attributes are not distinguishable to any specific category.

537 Monitor Markets 80% 20%

Efforts predominately support market services functions and CRR


538 Manage Tariff Rules Violations 100% Attributes are not distinguishable to any specific category.

543 Market Design 100% Attributes are not distinguishable to any specific category.

544 Maintain DMM Database 100% Attributes are not distinguishable to any specific category.

545 Manage Business Process & Continuous Improvement 100% Attributes are not distinguishable to any specific category.

546 Records Management 100% Attributes are not distinguishable to any specific category.

548

Manage Compliance Standards Development and

Implementation 100% Attributes are not distinguishable to any specific category.

549 Manage Compliance Investigations 100% Attributes are not distinguishable to any specific category.

550 Manage NERC Compliance 100% Attributes are not distinguishable to any specific category.

552 IT Reports & Documentation 100% Attributes are not distinguishable to any specific category.

553 Manage Vulnerability Remediation 100% Attributes are not distinguishable to any specific category.

554 Monitor & Maintain Backups 100% Attributes are not distinguishable to any specific category.

555 Manage Root Cause Analysis 100% Attributes are not distinguishable to any specific category.

80010 Support Customers & Stakeholders (SCS)

539 Representing the ISO 100% Attributes are not distinguishable to any specific category.

601 Manage Client Inquiries 80% 10% 5% 5%



smaller scale.

602 Account Management 80% 10% 5% 5%



smaller scale.

603 Manage Stakeholder Processes 80% 10% 5% 5%



smaller scale.

609 Manage External Affairs 100% Attributes are not distinguishable to any specific category.

610 Manage Communications & Public Relations 100% Attributes are not distinguishable to any specific category.


GMC

Finance/FPP of 67

MAPPING OF NON-ABC SUPPORT COSTS

For the next step, the CAISO pulled significant non-payroll ABC costs out of the operations and

maintenance budget and allocated to buckets based on specific charge codes or to indirect costs.

Table 7 — Mapping of Non-ABC Support Costs to Cost Categories

MAPPING OF ABC INDIRECT ACTIVITIES

ABC support activities were allocated to indirect costs.

Table 8 — Mapping of ABC Indirect Activities to Cost Categories

2019 Modified Revenue Requirement: Non‐ABC Support Costs

Component

Market

Services

System

Operations

CRR

Services

Reliability


Non‐ABC Support Costs

Corporate Services Divisions

Bank Fees 100% Attributes are not distinguishable to any specific category.

HR Support 100% Attributes are not distinguishable to any specific category.

Insurance 100% Attributes are not distinguishable to any specific category.

SSAE 16 Audit 45% 45% 5% 5% Use Process 80007, Task 412 allocations.

Market and Infrastructure Development Division (MID)

Market Surveillance Committee 80% 15% 5% Use Process 80002, Task 232 allocations.

Technology Division (TECH)

Hardware and Software Maintenance and Equipment 100% Attributes are not distinguishable to any specific category.

Intermittent Resource Forecasting Costs 80% 15% 5% Use Process 80005, Task 353 allocations.

Occupancy 100% Attributes are not distinguishable to any specific category.

Reliability Coordinator Tools 100% Use Process 80005, Task 370 allocations.

Telecommunications 100% Attributes are not distinguishable to any specific category.

Market Quality and California Regulatory Affairs Division (MQCRA)

Intermittent Resource Forecasting Costs 80% 15% 5% Use Process 80005, Task 353 allocations.

General Counsel Division (GC)

Operations Audit 24% 52% 24% Use Process 80005 total allocations.

Outside Legal 100% Attributes are not distinguishable to any specific category.


GMC

2019 Modified Revenue Requirement: ABC Indirect Costs

Component

Market

Services

System

Operations

CRR

Services

Reliability


ABC Indirect Costs80003: Manage Human Capabilities (MHC) 100% Attributes are not distinguishable to any specific category.


GMC

Finance/FPP of 67

MAPPING OF DEBT SERVICE AND CASH FUNDED CAPITAL

Debt service is the aggregation of principle, interest, and a 25% debt service reserve on the 2013 bonds.

The 2013 bonds refunded the 2009 bonds, which funded the building of CAISO’s corporate headquarters in

Folsom. The debt service was allocated 100 percent to indirect costs.

The revenue requirement also includes cash funded capital. The funds raised through the GMC

contribute to maintaining a long-term capital reserve fund, which varies from the capital project budget for that

year. The number of, and cost for, capital projects varies significantly from year to year. The annual budget

identifies the approved capital spending limits but not the projects themselves. A proposed listing is provided to

an internal management committee; which meets throughout the year to review and approve funding for specific

projects. Because of the uncertainty of the actual projects coming on line, 100% of the cash funded capital was

allocated to indirect costs.

Table 9 — Mapping of Debt Service and Capital to Cost Categories

MAPPING OF OTHER REVENUE AND OPERATING COST RESERVE ADJUSTMENT

The remaining revenue requirement components, other revenue and operating cost reserve adjustment,

were then analyzed and allocated to buckets based on specific charge codes or to indirect costs.

2019 Modified Revenue Requirement: Debt Service Bonds and Cash Funded Capital

Component

Market

Services

System

Operations

CRR

Services

Reliability


Debt Service Bonds 100%

Bonds used for Folsom location building and land. As

well as for feasibility studies.

Attributes are not distinguishable to any specific

category.

Cash Funded Capital 100%

Amounts and projects vary yearly thus attributes are not

distinguishable to any specific category.


GMC

Finance/FPP of 67

Table 10 — Mapping of Other Revenue to Cost Categories

Table 11 — Mapping of Operating Cost Reserve Adjustment to Cost Categories

MAPPING OF INDIRECT COSTS

Indirect costs were aggregated and then allocated proportionally to direct costs. After this mapping is

completed it can be applied to the CAISO revenue requirement to derive the related cost of service.

2019 Modified Revenue Requirement: Other Costs and Revenue

Component

Market

Services

System

Operations

CRR

Services

Reliability


Other Costs and Revenue

California‐Oregon Intertie Path Operator Fees 100% Fees offset system operations costs.

Energy Imbalance Market Administration Charges 100% Attributes are not distinguishable to any specific category.

Interest Earnings 100% Attributes are not distinguishable to any specific category.

Intermittent Resource Forecasting Fees 80% 15% 5% Use Process 80005, Task 353 allocations.

Generator Interconnection Project Fees and Application Fees 100% Use Process 80001, Task 203 allocations.

HANA Administrative Fees* 100% Use Process 80005, Task 370 allocations.

Metered Sub‐Station Penalties 100% Attributes are not distinguishable to any specific category.

Planning Coordinator Fees 100% Use Process 80001, Task 204 allocations.

SC Application Fees 100% Attributes are not distinguishable to any specific category.

Reliability Coordinator Funding Requirement* 100% Use Process 80005, Task 370 allocations.

* Modifications were made to the 2019 Revenue Requirement to include HANA Administrative Fees and a full year's worth of Reliability Coordinator

Funding Requirement as these services were not or partially included in the original 2019 Revenue Requirement. As a reminder, the CAISO began

offering Reliability Coordinator services July 1, 2019.


GMC

2019 Modified Revenue Requirement: Operating Cost Reserve Adjustment

Component

Market

Services

System

Operations

CRR

Services

Reliability


Operating Cost Reserve Adjustment

Adjustment in 15% Reserve for O&M 100%

25% Debt Service Reserve for 2013 Bonds 100%

Revenue Changes 100%

Expense Changes 100% Attributes are not distinguishable to any specific category.


GMC

Finance/FPP of 67

Costing the 2019 GMC Revenue Requirement

The CAISO applied the allocation matrix of level 2 activities to the 2019 revenue requirement to

determine the costs associated with the cost categories. Modifications were made to the other costs and revenue

category to include HANA administrative fees and a full year's worth of reliability coordinator (RC) funding

requirement as these services were not included, in the case of HANA administrative fees, or partially included, in

the case of the RC funding requirement, in the original 2019 revenue requirement. As a reminder, the CAISO

began offering RC services July 1, 2019. The 2019 revenue requirement data and employee hours are the most

recent information available to both determine the cost category percentage updates for the 2021 GMC tariff filing.

Table 12 — 2019 Modified GMC Revenue Requirement Components

Completing the analysis required the following steps:

1. Breaking out non-ABC operations and maintenance (O&M) support costs and applying cost category

percentages to these costs;

2. Allocating the ABC direct and indirect O&M costs into two components: level 2 activities and support

costs. This process involved:

a. allocating cost centers to level 1 ABC activities

b. applying cost category percentages to level 1 support costs

2019 Modified GMC Revenue Requirement

Components

Budget

($ in thousands)

Operations and Maintenance 189,030$

Debt Service 16,904$

Cash Funded Capital 25,000$

Other Costs and Revenues (38,662)$

Operating Costs Reserve Adjustment (13,480)$

Total 178,792$

Finance/FPP of 67

c. obtaining time estimates for level 2 activities for those level 1 activities that are direct operating

costs

d. allocating costs to level 2 activities

e. applying cost category percentages;

3. Allocating remaining revenue requirement components to cost categories and applying cost category

percentages to these costs;

4. Aggregating costs and allocating indirect costs to cost categories based on percentage of direct

costs, allocating fees to the cost category buckets and determining resulting cost category

percentages; and

5. Dividing resulting costs by estimated volumes to determine 2019 rates using revised cost category

percentages.

Step 1: Breaking Out Non‐ABC Support Costs

There are two types of O&M costs; those that are activity related such as costs attributed to personnel,

and non-ABC costs such as facilities costs. The O&M budget was broken down into those two categories. The

significant non-ABC support costs were removed from the divisions and allocated separately.

Table 13 — Allocation of Costs to ABC Activities and Non-ABC Activities

Division

ABC

Activity

Costs

Non‐ABC

Activity

Costs Total

Corporate Services 14,631$ 5,683$ 20,314$

Market and Infrastructure Development 16,514$ 314 16,828$

Technology 45,464$ 24,921 70,385$

Operations 47,457$ ‐ 47,457$

General Counsel 11,943$ 2,726 14,669$

Market Quality and California Regulatory Affairs 8,609$ 355 8,964$

External and Customer Affairs 10,413$ ‐ 10,413$

Total 155,031$ 33,999$ 189,030$

2019 Operations and Maintenance Budget

($ in thousands)

Finance/FPP of 67

These budgeted costs were allocated using the percentages shown in Table 7 — Mapping of Non-ABC

Support Costs to Cost Categories.

Table 14 — Allocation of Non-ABC Support Costs to Cost Categories

Step 2: Allocation of O&M Costs

For activity related O&M costs, the current ABC structure was utilized to allocate costs between the cost

categories. CAISO activities were broken out into nine level 1 ABC activities as shown in Table 5 — Level 1 ABC

Activities. For the direct operating level 1 activities, the associated level 2 activities were mapped to one of the

three cost categories as shown in Table 6 — Mapping of ABC Direct Operating Activities to Cost Categories. The

level 1 support activities were allocated to ABC support costs.

The O&M budget is comprised of approximately 111 cost centers. The reported 2019 time card data was

collected and the percentage breakdown of each cost center by the level one and level 2 direct activities was

determined. The percentage was applied to the activity budget for the cost center to allocate the cost center

activity budget by dollars to the level one and level 2 direct operating activities.


Component

Market

Services

System

Operations

CRR

Services

Reliability

Coordinator Indirect

2019

Budget

Market

Services

System

Operations

CRR

Services

Reliability




Bank Fees 100% 430$ $ ‐ $ ‐ $ ‐ $ ‐ 430$

HR Support 100% 2,392$ $ ‐ $ ‐ $ ‐ $ ‐ 2,392$

Insurance 100% 2,301$ $ ‐ $ ‐ $ ‐ $ ‐ 2,301$

SSAE 16 Audit 45% 45% 5% 5% 560$ 252$ 252$ 28$ 28$ ‐$

Corporate Services Division Total 5,683$ 252$ 252$ 28$ 28$ 5,123$

Market and Infrastructure Development Division (MID) ‐$

Market Surveillance Committee 80% 15% 5% 314$ 251$ 47$ 16$ ‐$ ‐$

MID Total 314$ 251$ 47$ 16$ ‐$ ‐$

Technology Division (TECH) ‐$ ‐$ ‐$ ‐$

Hardware and Software Maintenance and Equipment 100% 12,630$ ‐$ ‐$ ‐$ ‐$ 12,630$

Intermittent Resource Forecasting Costs 80% 15% 5% 986$ 789$ 148$ ‐$ 49$ ‐$

Occupancy 100% 5,624$ $ ‐ $ ‐ $ ‐ $ ‐ 5,624$

Reliability Coordinator Tools 100% 1,015$ $ ‐ $ ‐ $ ‐ $ 1,015 ‐$

Telecommunications 100% 4,666$ $ ‐ $ ‐ $ ‐ $ ‐ 4,666$

Technology Total 24,921$ 789$ 148$ ‐$ 1,064$ 22,920$

Market Quality and California Regulatory Affairs Division (MQCRA) ‐$

Intermittent Resource Forecasting Costs 80% 15% 5% 355$ 284$ 53$ ‐$ 18$ ‐$

MQCRA Total 355$ 284$ 53$ ‐$ 18$ ‐$

General Counsel Division (GC) ‐$ ‐$ ‐$ ‐$

Operations Audit 24% 52% 24% 126$ 30$ 66$ ‐$ 30$ ‐$

Outside Legal 100% 2,600$ $ ‐ $ ‐ $ ‐ $ ‐ 2,600$

General Counsel Total 2,726$ 30$ 66$ ‐$ 30$ 2,600$

Total Non‐ABC Support Costs 33,999$ 1,606$ 566$ 44$ 1,140$ 30,643$

budget allocations (amounts in thousands)cost category % allocation

GMC GMC

Finance/FPP of 67

ABC DIRECT OPERATING ACTIVITIES

Table 15 — Allocation of Division Hours to Direct Operating Activities

The hours were then aggregated by level 2 activity.

ABC

Process


Corporate

Services

Market and

Infrastructure

Development Technology Operations

General

Counsel

Market

Quality

and

California

Regulatory

Affairs

External and

Customer

Affairs Total

Direct

80001 Develop Infrastructure 4% 92% 0% 2% 0% 1% 1% 100%

80002 Develop Markets 0% 50% 0% 6% 9% 34% 0% 100%

80004 Manage Market & Reliability Data & Modeling 5% 1% 23% 62% 0% 3% 6% 100%

80005 Manage Market & Grid 0% 0% 4% 96% 0% 1% 0% 100%

80007 Manage Operations Support & Settlements 2% 0% 5% 77% 0% 15% 2% 100%

80008 Plan & Manage Business 7% 0% 87% 0% 6% 0% 0% 100%

80009 Support Business Services 13% 0% 71% 1% 15% 0% 0% 100%

80010 Support Customers & Stakeholders 0% 1% 0% 1% 0% 10% 88% 100%

Total 6% 10% 33% 35% 5% 4% 6% 100%

Allocation of Hours By Division

Finance/FPP of 67

Table 16 — Allocation of Division Hours to Level 2 Activities


Corporate

Services

Market and

Infrastructure


General

Counsel

Market

Quality

and

California

Regulatory

Affairs

External

and

Customer

Affairs Total


201 Develop and Monitor Regulatory Contract Procedures 0% 93% 0% 0% 0% 0% 7% 100%

202 Manage Generator Interconnection Agreements 0% 100% 0% 0% 0% 0% 0% 100%

203 Manage Generator Interconnection Process 16% 84% 0% 0% 0% 0% 0% 100%

204 Manage Long Term Transmission Planning 0% 100% 0% 0% 0% 0% 0% 100%

205 Manage New Transmission Resources 0% 30% 0% 50% 0% 19% 0% 100%

206 Manage Transmission Maintenance Standards 0% 100% 0% 0% 0% 0% 0% 100%

207 Manage Load Resource Data 0% 100% 0% 0% 0% 0% 0% 100%

208 Seasonal Assessment 0% 91% 0% 0% 0% 9% 0% 100%

209 Manage Queue Management 0% 100% 0% 0% 0% 0% 0% 100%

210 Manage Annual Delivery Assessment 0% 100% 0% 0% 0% 0% 0% 100%

10 Total DI 4% 92% 0% 2% 0% 1% 1% 100%


226 Manage Regulatory Filings 0% 0% 0% 0% 100% 0% 0% 100%

227 Manage Tariff Amendments 0% 0% 0% 0% 100% 0% 0% 100%

228 Manage Post Order, Rehearing, and Compliance 0% 0% 0% 0% 100% 0% 0% 100%

229 Develop State / Federal Regulatory Policy 0% 15% 0% 85% 0% 0% 0% 100%

230 BPM Change Management 0% 29% 0% 71% 0% 0% 0% 100%

231 Develop Infrastructure Policy 0% 90% 0% 8% 0% 2% 0% 100%

232 Perform Market Analysis 0% 5% 0% 0% 0% 95% 0% 100%

233 Develop Market Design 0% 87% 0% 0% 0% 13% 0% 100%

234 Manage Regulatory Contract Negotiations 0% 100% 0% 0% 0% 0% 0% 100%

9 Total DM 0% 50% 0% 6% 9% 34% 0% 100%


Finance/FPP of 67


Corporate

Services

Market and

Infrastructure


General

Counsel

Market

Quality

and

California

Regulatory

Affairs

External

and

Customer

Affairs Total


301 Manage Full Network Model Maintenance 0% 0% 86% 14% 0% 0% 0% 100%

302 Plan & Develop Operations Simulator Training 0% 0% 1% 99% 0% 0% 0% 100%

304 EMAA Telemetry 0% 0% 0% 100% 0% 0% 0% 100%

307 Manage Congestion Revenue Rights 0% 0% 0% 100% 0% 0% 0% 100%

308 Manage Credit & Collateral 100% 0% 0% 0% 0% 0% 0% 100%

309 Resource Management 0% 0% 0% 100% 0% 0% 0% 100%

310 Manage Reliability Requirements 0% 18% 0% 65% 0% 17% 0% 100%

311 Manage Operations Planning 0% 0% 0% 100% 0% 0% 0% 100%

312 Manage WECC Studies 0% 0% 0% 100% 0% 0% 0% 100%

314 Manage & Facilitate Procedure Maintenance 0% 0% 0% 100% 0% 0% 0% 100%

316 Plan & Develop Operations Training 0% 0% 0% 98% 0% 2% 0% 100%

317 Execute & Track Operations Training 0% 0% 0% 100% 0% 0% 0% 100%

320 Provide Stakeholder Training 0% 0% 0% 2% 0% 0% 98% 100%

321 Schedule Coordinator Management 0% 10% 0% 0% 0% 0% 90% 100%

322 Register, Modify and Terminate PDR Resource 0% 0% 0% 100% 0% 0% 0% 100%

323 Calculate & Monitor Energy Costs & Indices 31% 0% 0% 0% 0% 69% 0% 100%

10 Total MMR 5% 1% 23% 62% 0% 3% 6% 100%


352 Manage Day Ahead Market Support 0% 0% 4% 36% 0% 60% 0% 100%

353 Operations Real Time Support 0% 0% 78% 20% 0% 2% 0% 100%

355 Outage Model & Management 0% 0% 0% 100% 0% 0% 0% 100%

360 Real Time Operations 0% 0% 0% 100% 0% 0% 0% 100%

362 Manage Operations Engineering Support 0% 0% 0% 100% 0% 0% 0% 100%

367 Manage Operations Compliance & Event Analysis 0% 0% 0% 100% 0% 0% 0% 100%

368 Manage Day Ahead and Market Operations 0% 0% 0% 100% 0% 0% 0% 100%

370 Manage Real Time Reliability Coordination 0% 0% 0% 100% 0% 0% 0% 100%

6 Total MMG 0% 0% 4% 96% 0% 1% 0% 100%


Finance/FPP of 67


Corporate

Services

Market and

Infrastructure


General

Counsel

Market

Quality

and

California

Regulatory

Affairs

External

and

Customer

Affairs Total


401 Perform Market Validation 0% 0% 0% 100% 0% 0% 0% 100%

402 Manage Dispute Analysis & Resolution 0% 0% 5% 95% 0% 0% 0% 100%

403 Manage Market Quality System 0% 0% 53% 47% 0% 0% 0% 100%

406 Manage Rules of Conduct 0% 0% 0% 100% 0% 0% 0% 100%

409 Meter Data Acquisition and Processing 0% 0% 0% 100% 0% 0% 0% 100%

411 Manage Market Clearing 100% 0% 0% 0% 0% 0% 0% 100%

412 Manage Market Billing & Settlements 0% 0% 0% 91% 0% 0% 9% 100%

413 Manage Reliability Must Run Settlements 0% 0% 0% 0% 0% 0% 100% 100%

414 Manage Settlements Quarterly Release Cycle 0% 0% 0% 100% 0% 0% 0% 100%

417 Perform Market Report 0% 0% 0% 47% 0% 53% 0% 100%

418 Manage Good Faith Negotiation Requests 0% 0% 0% 0% 54% 0% 46% 100%

419 Manage Price Corrections 0% 0% 0% 24% 0% 76% 0% 100%

12 Total MOS 2% 0% 5% 77% 0% 15% 2% 100%


451 Manage Financial Planning 98% 0% 0% 0% 0% 2% 0% 100%

452 Manage Application, Environment & Infrastructure 0% 0% 100% 0% 0% 0% 0% 100%

453 Manage Resource Allocation 0% 0% 100% 0% 0% 0% 0% 100%

454 Project Portfolio Management 0% 0% 99% 1% 0% 0% 0% 100%

455 Manage Technology Collaboration (Internal) 0% 0% 100% 0% 0% 0% 0% 100%

457 Manage Annual Functional Release Lifecycle 0% 0% 100% 0% 0% 0% 0% 100%

459 Enterprise Risk Management 0% 0% 0% 0% 100% 0% 0% 100%

461 Perform Board Processes 3% 3% 0% 0% 91% 0% 3% 100%

462 Manage Technology Collaboration (External) 0% 0% 100% 0% 0% 0% 0% 100%

466 Manage Corporate Goal Alignment and Reporting 0% 0% 31% 0% 69% 0% 0% 100%

467 Research & Proof of Concept 0% 0% 100% 0% 0% 0% 0% 100%

469 Manage Project & Effort Lifecycles 0% 0% 100% 0% 0% 0% 0% 100%

12 Total PMB 7% 0% 87% 0% 6% 0% 0% 100%


Finance/FPP of 67


Corporate

Services

Market and

Infrastructure


General

Counsel

Market

Quality

and

California

Regulatory

Affairs

External

and

Customer

Affairs Total


501 Manage Monthly Financial Cycle 100% 0% 0% 0% 0% 0% 0% 100%

502 Invest Corporate Funds 100% 0% 0% 0% 0% 0% 0% 100%

503 Manage Financial Reporting 98% 0% 0% 0% 2% 0% 0% 100%

504 IT Application, System, & Non‐Production Support 0% 0% 100% 0% 0% 0% 0% 100%

505 IT Asset Management 0% 0% 100% 0% 0% 0% 0% 100%

508 IT Configuration, Change & Release Management 0% 0% 99% 1% 0% 0% 0% 100%

510 IT Event Management 0% 0% 100% 0% 0% 0% 0% 100%

511 IT Incident Management 0% 0% 100% 0% 0% 0% 0% 100%

512 IT Information Security Management 0% 0% 100% 0% 0% 0% 0% 100%

513 IT Problem & Risk Lifecycle Management 0% 0% 100% 0% 0% 0% 0% 100%

519 Provision and Manage Access 0% 0% 100% 0% 0% 0% 0% 100%

520 Manage Facilities, Physical Security, & Safety 0% 0% 100% 0% 0% 0% 0% 100%

521 Facilities Incident Management 0% 0% 100% 0% 0% 0% 0% 100%

522 Corporate Incident Response & Disaster Recovery 13% 0% 1% 33% 45% 0% 7% 100%

523 Manage Business Continuity Plan 3% 1% 84% 9% 1% 0% 1% 100%

528 Procurement & Vendor Management 99% 0% 1% 0% 0% 0% 0% 100%

529 Provide Legal Advice 0% 0% 0% 0% 100% 0% 0% 100%

530 Manage Dispute Resolution 0% 0% 12% 0% 88% 0% 0% 100%

533 Manage Evidence Review / Audit 0% 0% 50% 50% 0% 0% 0% 100%

535 Tariff Controls Monitoring 0% 0% 6% 0% 94% 0% 0% 100%

536 Manage Internal Audit 0% 0% 1% 0% 99% 0% 0% 100%

537 Monitor Markets 98% 0% 0% 2% 0% 0% 0% 100%

538 Manage Tariff Rules Violations 80% 0% 0% 0% 20% 0% 0% 100%

543 Market Design 100% 0% 0% 0% 0% 0% 0% 100%

544 Maintain DMM Database 100% 0% 0% 0% 0% 0% 0% 100%

545 Manage Business Process & Continuous Improvement 0% 0% 81% 19% 0% 0% 0% 100%

546 Records Management 4% 4% 2% 7% 83% 0% 0% 100%

548


Implementation 0% 17% 35% 31% 17% 0% 0% 100%

549 Manage Compliance Investigations 0% 0% 13% 0% 87% 0% 0% 100%

550 Manage NERC Compliance 0% 6% 8% 1% 85% 0% 0% 100%

552 IT Reports & Documentation 0% 0% 100% 0% 0% 0% 0% 100%

553 Manage Vulnerability Remediation 0% 0% 100% 0% 0% 0% 0% 100%

554 Monitor & Maintain Backups 0% 0% 100% 0% 0% 0% 0% 100%

555 Manage Root Cause Analysis 0% 0% 0% 92% 8% 0% 0% 100%

34 Total SBS 13% 0% 71% 1% 15% 0% 0% 100%


539 Representing the ISO 0% 20% 3% 2% 0% 62% 13% 100%

601 Manage Client Inquiries 0% 0% 0% 4% 0% 0% 96% 100%

602 Account Management 0% 0% 0% 0% 0% 0% 100% 100%

603 Manage Stakeholder Processes 0% 2% 0% 0% 0% 0% 98% 100%

609 Manage External Affairs 0% 0% 0% 0% 1% 21% 78% 100%

610 Manage Communications & Public Relations 0% 0% 0% 0% 0% 0% 100% 100%

6 Total SCS 0% 1% 0% 1% 0% 10% 88% 100%

Total Direct O&M 6% 10% 33% 35% 5% 4% 6% 100%


Finance/FPP of 67

DIRECT OPERATING ACTIVITIES

The direct operating activities costs were factored into the allocation matrix shown in Table 6 — Mapping

of ABC Direct Operating Activities to Cost Categories to get the costs to the cost categories.

Table 17 — Allocation of Division Costs to Direct Operating Activities

The costs were then aggregated by level 2 activity.

ABC

Process


Corporate

Services

Market and

Infrastructure


General

Counsel

Market

Quality

and

California

Regulatory

Affairs

External and

Customer

Affairs Total

Direct

80001 Develop Infrastructure 629$ 11,623$ ‐$ 416$ 24$ 125$ 46$ 12,863$

80002 Develop Markets 170$ 4,190$ ‐$ 599$ 1,302$ 3,442$ ‐$ 9,703$

80004 Manage Market & Reliability Data & Modeling 1,303$ 227$ 3,247$ 9,678$ ‐$ 1,098$ 923$ 16,476$

80005 Manage Market & Grid 610$ ‐$ 799$ 28,077$ ‐$ 206$ ‐$ 29,692$

80007 Manage Operations Support & Settlements 359$ ‐$ 406$ 6,132$ 19$ 2,127$ 181$ 9,224$

80008 Plan & Manage Business 1,282$ 51$ 14,432$ 13$ 2,039$ 19$ 90$ 17,926$

80009 Support Business Services 6,814$ 251$ 26,511$ 2,457$ 8,473$ 4$ 18$ 44,528$

80010 Support Customers & Stakeholders 178$ 163$ 24$ 64$ 41$ 1,575$ 9,154$ 11,199$

Total 11,345$ 16,505$ 45,419$ 47,436$ 11,898$ 8,596$ 10,412$ 151,611$

Allocation of Costs By Division ($ in thousands)

Finance/FPP of 67

Table 18 — Allocation of Division Costs to Level 2 Activity



Corporate

Services

Market and

Infrastructure

Development Technology

Operations

General

Counsel

Market

Quality

and

California

Regulatory

Affairs

External

and

Customer

Affairs Total


201 Develop and Monitor Regulatory Contract Procedures 18$ 580$ ‐$ ‐$ ‐$ ‐$ 46$ 644$

202 Manage Generator Interconnection Agreements 9$ 310$ ‐$ ‐$ ‐$ ‐$ ‐$ 319$

203 Manage Generator Interconnection Process 449$ 2,289$ ‐$ 3$ 24$ ‐$ ‐$ 2,765$

204 Manage Long Term Transmission Planning 110$ 6,504$ ‐$ 4$ ‐$ ‐$ ‐$ 6,618$

205 Manage New Transmission Resources 10$ 179$ ‐$ 409$ ‐$ 87$ ‐$ 685$

206 Manage Transmission Maintenance Standards 10$ 504$ ‐$ ‐$ ‐$ ‐$ ‐$ 514$

207 Manage Load Resource Data 6$ 241$ ‐$ ‐$ ‐$ ‐$ ‐$ 247$

208 Seasonal Assessment 7$ 239$ ‐$ ‐$ ‐$ 38$ ‐$ 284$

209 Manage Queue Management 10$ 776$ ‐$ ‐$ ‐$ ‐$ ‐$ 786$

210 Manage Annual Delivery Assessment ‐$ 1$ ‐$ ‐$ ‐$ ‐$ ‐$ 1$

Total DI 629$ 11,623$ ‐$ 416$ 24$ 125$ 46$ 12,863$


226 Manage Regulatory Filings 10$ ‐$ ‐$ ‐$ 833$ ‐$ ‐$ 843$

227 Manage Tariff Amendments 5$ 2$ ‐$ ‐$ 458$ ‐$ ‐$ 465$

228 Manage Post Order, Rehearing, and Compliance ‐$ ‐$ ‐$ ‐$ 11$ ‐$ ‐$ 11$

229 Develop State / Federal Regulatory Policy 5$ 30$ ‐$ 282$ ‐$ ‐$ ‐$ 317$

230 BPM Change Management 5$ 47$ ‐$ 138$ ‐$ ‐$ ‐$ 190$

231 Develop Infrastructure Policy 45$ 2,031$ ‐$ 177$ ‐$ 55$ ‐$ 2,308$

232 Perform Market Analysis 55$ 120$ ‐$ 2$ ‐$ 3,121$ ‐$ 3,298$

233 Develop Market Design 35$ 1,603$ ‐$ ‐$ ‐$ 266$ ‐$ 1,904$

234 Manage Regulatory Contract Negotiations 10$ 357$ ‐$ ‐$ ‐$ ‐$ ‐$ 367$

Total DM 170$ 4,190$ ‐$ 599$ 1,302$ 3,442$ ‐$ 9,703$

Allocation of Costs By Division

budget allocations (amounts in thousands)

Finance/FPP of 67



Corporate

Services

Market and

Infrastructure


Operations

General

Counsel

Market

Quality

and

California

Regulatory

Affairs

External

and

Customer

Affairs Total


301 Manage Full Network Model Maintenance 109$ ‐$ 3,245$ 501$ ‐$ ‐$ ‐$ 3,855$

302 Plan & Develop Operations Simulator Training 9$ ‐$ 2$ 401$ ‐$ ‐$ ‐$ 412$

304 EMAA Telemetry 17$ ‐$ ‐$ 520$ ‐$ ‐$ ‐$ 537$

307 Manage Congestion Revenue Rights 19$ ‐$ ‐$ 108$ ‐$ ‐$ ‐$ 127$

308 Manage Credit & Collateral 782$ ‐$ ‐$ ‐$ ‐$ 1$ ‐$ 783$

309 Resource Management 28$ ‐$ ‐$ 1,309$ ‐$ ‐$ ‐$ 1,337$

310 Manage Reliability Requirements 24$ 208$ ‐$ 1,095$ ‐$ 174$ 2$ 1,503$

311 Manage Operations Planning 54$ ‐$ ‐$ 1,829$ ‐$ ‐$ ‐$ 1,883$

312 Manage WECC Studies 2$ ‐$ ‐$ 78$ ‐$ ‐$ ‐$ 80$

314 Manage & Facilitate Procedure Maintenance 13$ ‐$ ‐$ 290$ ‐$ ‐$ ‐$ 303$

316 Plan & Develop Operations Training 48$ ‐$ ‐$ 2,050$ ‐$ 61$ ‐$ 2,159$

317 Execute & Track Operations Training 29$ ‐$ ‐$ 1,327$ ‐$ ‐$ ‐$ 1,356$

320 Provide Stakeholder Training 21$ ‐$ ‐$ 1$ ‐$ ‐$ 751$ 773$

321 Schedule Coordinator Management 6$ 19$ ‐$ ‐$ ‐$ ‐$ 170$ 195$

322 Register, Modify and Terminate PDR Resource 5$ ‐$ ‐$ 169$ ‐$ ‐$ ‐$ 174$

323 Calculate & Monitor Energy Costs & Indices 137$ ‐$ ‐$ ‐$ ‐$ 862$ ‐$ 999$

Total MMR 1,303$ 227$ 3,247$ 9,678$ ‐$ 1,098$ 923$ 16,476$


352 Manage Day Ahead Market Support 7$ ‐$ 10$ 177$ ‐$ 186$ ‐$ 380$

353 Operations Real Time Support 28$ ‐$ 785$ 248$ ‐$ 20$ ‐$ 1,081$

355 Outage Model & Management 62$ ‐$ ‐$ 2,496$ ‐$ ‐$ ‐$ 2,558$

360 Real Time Operations 258$ ‐$ ‐$ 12,797$ ‐$ ‐$ ‐$ 13,055$

362 Manage Operations Engineering Support 101$ ‐$ ‐$ 3,915$ ‐$ ‐$ ‐$ 4,016$

367 Manage Operations Compliance & Event Analysis 18$ ‐$ ‐$ 75$ ‐$ ‐$ ‐$ 93$

368 Manage Day Ahead and Market Operations 51$ ‐$ 1$ 2,422$ ‐$ ‐$ ‐$ 2,474$

370 Manage Real Time Reliability Coordination 85$ ‐$ 3$ 5,947$ ‐$ ‐$ ‐$ 6,035$

Total MMG 610$ ‐$ 799$ 28,077$ ‐$ 206$ ‐$ 29,692$



Finance/FPP of 67



Corporate

Services

Market and

Infrastructure


Operations

General

Counsel

Market

Quality

and

California

Regulatory

Affairs

External

and

Customer

Affairs Total


401 Perform Market Validation 1$ ‐$ ‐$ 23$ ‐$ ‐$ ‐$ 24$

402 Manage Dispute Analysis & Resolution 29$ ‐$ 60$ 1,386$ ‐$ ‐$ ‐$ 1,475$

403 Manage Market Quality System 18$ ‐$ 346$ 209$ ‐$ ‐$ ‐$ 573$

406 Manage Rules of Conduct 2$ ‐$ ‐$ 70$ ‐$ ‐$ ‐$ 72$

409 Meter Data Acquisition and Processing 15$ ‐$ ‐$ 459$ ‐$ ‐$ ‐$ 474$

411 Manage Market Clearing 118$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ 118$

412 Manage Market Billing & Settlements 55$ ‐$ ‐$ 1,124$ ‐$ ‐$ 154$ 1,333$

413 Manage Reliability Must Run Settlements ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ 7$ 7$

414 Manage Settlements Quarterly Release Cycle 71$ ‐$ ‐$ 2,253$ ‐$ ‐$ ‐$ 2,324$

417 Perform Market Report 6$ ‐$ ‐$ 198$ ‐$ 745$ ‐$ 949$

418 Manage Good Faith Negotiation Requests 1$ ‐$ ‐$ ‐$ 19$ ‐$ 20$ 40$

419 Manage Price Corrections 43$ ‐$ ‐$ 410$ ‐$ 1,382$ ‐$ 1,835$

Total MOS 359$ ‐$ 406$ 6,132$ 19$ 2,127$ 181$ 9,224$


451 Manage Financial Planning 981$ ‐$ 3$ ‐$ ‐$ 19$ ‐$ 1,003$

452 Manage Application, Environment & Infrastructure 48$ ‐$ 3,066$ ‐$ ‐$ ‐$ ‐$ 3,114$

453 Manage Resource Allocation 3$ ‐$ 99$ ‐$ ‐$ ‐$ ‐$ 102$

454 Project Portfolio Management 28$ ‐$ 1,832$ 13$ ‐$ ‐$ ‐$ 1,873$

455 Manage Technology Collaboration (Internal) 60$ ‐$ 2,510$ ‐$ ‐$ ‐$ ‐$ 2,570$

457 Manage Annual Functional Release Lifecycle 5$ ‐$ 184$ ‐$ ‐$ ‐$ ‐$ 189$

459 Enterprise Risk Management 1$ ‐$ ‐$ ‐$ 60$ ‐$ ‐$ 61$

461 Perform Board Processes 70$ 51$ ‐$ ‐$ 1,853$ ‐$ 90$ 2,064$

462 Manage Technology Collaboration (External) 2$ ‐$ 145$ ‐$ ‐$ ‐$ ‐$ 147$

466 Manage Corporate Goal Alignment and Reporting 3$ ‐$ 49$ ‐$ 126$ ‐$ ‐$ 178$

467 Research & Proof of Concept 2$ ‐$ 205$ ‐$ ‐$ ‐$ ‐$ 207$

469 Manage Project & Effort Lifecycles 79$ ‐$ 6,339$ ‐$ ‐$ ‐$ ‐$ 6,418$

Total PMB 1,282$ 51$ 14,432$ 13$ 2,039$ 19$ 90$ 17,926$



Finance/FPP of 67



Corporate

Services

Market and

Infrastructure


Operations

General

Counsel

Market

Quality

and

California

Regulatory

Affairs

External

and

Customer

Affairs Total


501 Manage Monthly Financial Cycle 778$ ‐$ 1$ ‐$ ‐$ ‐$ ‐$ 779$

502 Invest Corporate Funds 500$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ 500$

503 Manage Financial Reporting 272$ ‐$ ‐$ ‐$ 5$ ‐$ ‐$ 277$

504 IT Application, System, & Non‐Production Support 343$ ‐$ 13,657$ ‐$ ‐$ ‐$ ‐$ 14,000$

505 IT Asset Management 17$ ‐$ 650$ ‐$ ‐$ ‐$ ‐$ 667$

508 IT Configuration, Change & Release Management 33$ ‐$ 1,441$ 13$ ‐$ ‐$ 4$ 1,491$

510 IT Event Management 4$ ‐$ 174$ ‐$ ‐$ ‐$ ‐$ 178$

511 IT Incident Management 96$ ‐$ 4,381$ ‐$ ‐$ 1$ ‐$ 4,478$

512 IT Information Security Management 36$ ‐$ 1,545$ 266$ 18$ ‐$ 1$ 1,866$

513 IT Problem & Risk Lifecycle Management 18$ 5$ 814$ ‐$ ‐$ ‐$ ‐$ 837$

519 Provision and Manage Access 12$ ‐$ 549$ ‐$ ‐$ ‐$ ‐$ 561$

520 Manage Facilities, Physical Security, & Safety 64$ 1$ 1,672$ 2$ ‐$ ‐$ ‐$ 1,739$

521 Facilities Incident Management ‐$ ‐$ 4$ ‐$ ‐$ ‐$ ‐$ 4$

522 Corporate Incident Response & Disaster Recovery 3$ ‐$ ‐$ 7$ 7$ ‐$ 2$ 19$

523 Manage Business Continuity Plan 44$ 5$ 1,101$ 1,566$ 372$ 3$ 10$ 3,101$

528 Procurement & Vendor Management 791$ ‐$ 13$ ‐$ ‐$ ‐$ ‐$ 804$

529 Provide Legal Advice 57$ ‐$ ‐$ ‐$ 3,879$ ‐$ ‐$ 3,936$

530 Manage Dispute Resolution 2$ ‐$ 8$ ‐$ 53$ ‐$ ‐$ 63$

533 Manage Evidence Review / Audit 3$ ‐$ 75$ 52$ ‐$ ‐$ ‐$ 130$

535 Tariff Controls Monitoring 7$ ‐$ 19$ ‐$ 395$ ‐$ ‐$ 421$

536 Manage Internal Audit 37$ ‐$ 12$ ‐$ 1,849$ ‐$ ‐$ 1,898$

537 Monitor Markets 1,914$ ‐$ 3$ 70$ ‐$ ‐$ ‐$ 1,987$

538 Manage Tariff Rules Violations 34$ ‐$ ‐$ ‐$ 15$ ‐$ ‐$ 49$

543 Market Design 358$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ 358$

544 Maintain DMM Database 1,329$ ‐$ 1$ ‐$ ‐$ ‐$ ‐$ 1,330$

545 Manage Business Process & Continuous Improvement 5$ ‐$ 191$ 46$ ‐$ ‐$ ‐$ 242$

546 Records Management 12$ 16$ 3$ 8$ 178$ ‐$ 1$ 218$

548


Implementation 2$ 17$ 25$ 37$ 15$ ‐$ ‐$ 96$

549 Manage Compliance Investigations 3$ ‐$ 18$ ‐$ 155$ ‐$ ‐$ 176$

550 Manage NERC Compliance 33$ 207$ 111$ ‐$ 1,500$ ‐$ ‐$ 1,851$

552 IT Reports & Documentation ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$

553 Manage Vulnerability Remediation ‐$ ‐$ 2$ ‐$ ‐$ ‐$ ‐$ 2$

554 Monitor & Maintain Backups 1$ ‐$ 41$ ‐$ ‐$ ‐$ ‐$ 42$

555 Manage Root Cause Analysis 6$ ‐$ ‐$ 390$ 32$ ‐$ ‐$ 428$

Total SBS 6,814$ 251$ 26,511$ 2,457$ 8,473$ 4$ 18$ 44,528$


539 Representing the ISO 8$ 145$ 17$ 7$ ‐$ 907$ 69$ 1,153$

601 Manage Client Inquiries 38$ 4$ 7$ 57$ ‐$ 2$ 1,538$ 1,646$

602 Account Management 19$ ‐$ ‐$ ‐$ ‐$ ‐$ 699$ 718$

603 Manage Stakeholder Processes 20$ 10$ ‐$ ‐$ ‐$ ‐$ 927$ 957$

609 Manage External Affairs 57$ 4$ ‐$ ‐$ 41$ 666$ 4,161$ 4,929$

610 Manage Communications & Public Relations 36$ ‐$ ‐$ ‐$ ‐$ ‐$ 1,760$ 1,796$

Total SCS 178$ 163$ 24$ 64$ 41$ 1,575$ 9,154$ 11,199$

Total Direct O&M 11,345$ 16,505$ 45,419$ 47,436$ 11,898$ 8,596$ 10,412$ 151,611$



Finance/FPP of 67

For direct operating activities the costs were aggregated at level 2 and allocated to the cost category

identified in Table 6 — Mapping of ABC Direct Operating Activities to Cost Categories.

Table 19 — Allocation of ABC Direct Operating Activity Costs to Cost Categories



Market

Services

System

Operations

CRR

Services

Reliability


2019

Budget

Market

Services

System

Operations

CRR

Services

Reliability



201 Develop and Monitor Regulatory Contract Procedures 95% 5% $ 644 612$ ‐$ ‐$ 32$ ‐$

202 Manage Generator Interconnection Agreements 100% $ 319 ‐$ 319$ ‐$ ‐$ ‐$

203 Manage Generator Interconnection Process 100% $ 2,765 ‐$ 2,765$ ‐$ ‐$ ‐$

204 Manage Long Term Transmission Planning 100% $ 6,618 ‐$ 6,618$ ‐$ ‐$ ‐$

205 Manage New Transmission Resources 95% 5% $ 685 ‐$ 651$ ‐$ 34$ ‐$

206 Manage Transmission Maintenance Standards 100% $ 514 ‐$ 514$ ‐$ ‐$ ‐$

207 Manage Load Resource Data 100% $ 247 ‐$ 247$ ‐$ ‐$ ‐$

208 Seasonal Assessment 100% $ 284 ‐$ 284$ ‐$ ‐$ ‐$

209 Manage Queue Management 100% $ 786 ‐$ 786$ ‐$ ‐$ ‐$

210 Manage Annual Delivery Assessment 100% $ 1 ‐$ 1$ ‐$ ‐$ ‐$

Total DI 12,863$ 612$ 12,185$ ‐$ 66$ ‐$

‐


226 Manage Regulatory Filings 100% 843$ ‐$ ‐$ ‐$ ‐$ 843$

227 Manage Tariff Amendments 100% 465$ ‐$ ‐$ ‐$ ‐$ 465$

228 Manage Post Order, Rehearing, and Compliance 100% 11$ ‐$ ‐$ ‐$ ‐$ 11$

229 Develop State / Federal Regulatory Policy 40% 60% 317$ 127$ 190$ ‐$ ‐$ ‐$

230 BPM Change Management 80% 10% 5% 5% 190$ 151$ 19$ 10$ 10$ ‐$

231 Develop Infrastructure Policy 40% 60% 2,308$ 923$ 1,385$ ‐$ ‐$ ‐$

232 Perform Market Analysis 80% 15% 5% 3,298$ 2,638$ 495$ 165$ ‐$ ‐$

233 Develop Market Design 100% 1,904$ 1,904$ ‐$ ‐$ ‐$ ‐$

234 Manage Regulatory Contract Negotiations 95% 5% 367$ 349$ ‐$ ‐$ 18$ ‐$

Total DM 9,703$ 6,092$ 2,089$ 175$ 28$ 1,319$

cost category % allocation budget allocations (amounts in thousands)

GMC GMC

Finance/FPP of 67



Market

Services

System

Operations

CRR

Services

Reliability


2019

Budget

Market

Services

System

Operations

CRR

Services

Reliability



301 Manage Full Network Model Maintenance 45% 45% 5% 5% 3,855$ 1,735$ 1,734$ 193$ 193$ ‐$

302 Plan & Develop Operations Simulator Training 95% 5% 412$ ‐$ 391$ ‐$ 21$ ‐$

304 EMAA Telemetry 50% 50% 537$ 268$ 269$ ‐$ ‐$ ‐$

307 Manage Congestion Revenue Rights 100% 127$ ‐$ ‐$ 127$ ‐$ ‐$

308 Manage Credit & Collateral 40% 40% 20% 783$ 313$ 313$ 157$ ‐$ ‐$

309 Resource Management 50% 50% 1,337$ 669$ 668$ ‐$ ‐$ ‐$

310 Manage Reliability Requirements 100% 1,503$ ‐$ 1,503$ ‐$ ‐$ ‐$

311 Manage Operations Planning 95% 5% 1,883$ ‐$ 1,789$ ‐$ 94$ ‐$

312 Manage WECC Studies 100% 80$ ‐$ 80$ ‐$ ‐$ ‐$

314 Manage & Facilitate Procedure Maintenance 95% 5% 303$ ‐$ 288$ ‐$ 15$ ‐$

316 Plan & Develop Operations Training 95% 5% 2,159$ ‐$ 2,051$ ‐$ 108$ ‐$

317 Execute & Track Operations Training 95% 5% 1,356$ ‐$ 1,288$ ‐$ 68$ ‐$

320 Provide Stakeholder Training 60% 30% 5% 5% 773$ 463$ 232$ 39$ 39$ ‐$

321 Schedule Coordinator Management 45% 45% 5% 5% 195$ 87$ 88$ 10$ 10$ ‐$

322 Register, Modify and Terminate PDR Resource 100% 174$ 174$ ‐$ ‐$ ‐$ ‐$

323 Calculate & Monitor Energy Costs & Indices 60% 35% 5% 999$ 599$ 350$ ‐$ 50$ ‐$

Total MMR 16,476$ 4,308$ 11,044$ 526$ 598$ ‐$

‐


352 Manage Day Ahead Market Support 95% 5% 380$ 361$ ‐$ ‐$ 19$ ‐$

353 Operations Real Time Support 80% 15% 5% 1,081$ 865$ 162$ ‐$ 54$ ‐$

355 Outage Model & Management 5% 60% 35% 2,558$ 128$ 1,535$ ‐$ 895$ ‐$

360 Real Time Operations 20% 80% 13,055$ 2,611$ 10,444$ ‐$ ‐$ ‐$

362 Manage Operations Engineering Support 15% 80% 5% 4,016$ 602$ 3,213$ ‐$ 201$ ‐$

367 Manage Operations Compliance & Event Analysis 50% 50% 93$ ‐$ 46$ ‐$ 47$ ‐$

368 Manage Day Ahead and Market Operations 100% 2,474$ 2,474$ ‐$ ‐$ ‐$ ‐$

370 Manage Real Time Reliability Coordination 100% 6,035$ ‐$ ‐$ ‐$ 6,035$ ‐$

Total MMG 29,692$ 7,041$ 15,400$ ‐$ 7,251$ ‐$

MMG %s 100% 24% 52% 0% 24% 0%


GMC GMC

Finance/FPP of 67



Market

Services

System

Operations

CRR

Services

Reliability


2019

Budget

Market

Services

System

Operations

CRR

Services

Reliability



401 Perform Market Validation 80% 20% 24$ 19$ 5$ ‐$ ‐$ ‐$

402 Manage Dispute Analysis & Resolution 100% 1,475$ 1,475$ ‐$ ‐$ ‐$ ‐$

403 Manage Market Quality System 50% 40% 10% 573$ 287$ 229$ 57$ ‐$ ‐$

406 Manage Rules of Conduct 100% 72$ ‐$ ‐$ ‐$ ‐$ 72$

409 Meter Data Acquisition and Processing 100% 474$ 474$ ‐$ ‐$ ‐$ ‐$

411 Manage Market Clearing 45% 45% 5% 5% 118$ 53$ 53$ 6$ 6$ ‐$

412 Manage Market Billing & Settlements 45% 45% 5% 5% 1,333$ 600$ 599$ 67$ 67$ ‐$

413 Manage Reliability Must Run Settlements 100% 7$ ‐$ 7$ ‐$ ‐$ ‐$

414 Manage Settlements Quarterly Release Cycle 45% 45% 5% 5% 2,324$ 1,046$ 1,046$ 116$ 116$ ‐$

417 Perform Market Report 80% 20% 949$ 759$ 190$ ‐$ ‐$ ‐$

418 Manage Good Faith Negotiation Requests 100% 40$ 40$ ‐$ ‐$ ‐$ ‐$

419 Manage Price Corrections 50% 40% 10% 1,835$ 917$ 734$ 184$ ‐$ ‐$

Total MOS 9,224$ 5,670$ 2,863$ 430$ 189$ 72$

‐


451 Manage Financial Planning 100% 1,003$ ‐$ ‐$ ‐$ ‐$ 1,003$

452 Manage Application, Environment & Infrastructure 100% 3,114$ ‐$ ‐$ ‐$ ‐$ 3,114$

453 Manage Resource Allocation 100% 102$ ‐$ ‐$ ‐$ ‐$ 102$

454 Project Portfolio Management 100% 1,873$ ‐$ ‐$ ‐$ ‐$ 1,873$

455 Manage Technology Collaboration (Internal) 100% 2,570$ 2,570$ ‐$ ‐$ ‐$ ‐$

457 Manage Annual Functional Release Lifecycle 100% 189$ ‐$ ‐$ ‐$ ‐$ 189$

459 Enterprise Risk Management 100% 61$ ‐$ ‐$ ‐$ ‐$ 61$

461 Perform Board Processes 100% 2,064$ ‐$ ‐$ ‐$ ‐$ 2,064$

462 Manage Technology Collaboration (External) 100% 147$ 147$ ‐$ ‐$ ‐$ ‐$

466 Manage Corporate Goal Alignment and Reporting 100% 178$ ‐$ ‐$ ‐$ ‐$ 178$

467 Research & Proof of Concept 100% 207$ ‐$ ‐$ ‐$ ‐$ 207$

469 Manage Project & Effort Lifecycles 100% 6,418$ ‐$ ‐$ ‐$ ‐$ 6,418$

Total PMB 17,926$ 2,717$ ‐$ ‐$ ‐$ 15,209$


GMC GMC

Finance/FPP of 67



Market

Services

System

Operations

CRR

Services

Reliability


2019

Budget

Market

Services

System

Operations

CRR

Services

Reliability



501 Manage Monthly Financial Cycle 100% 779$ ‐$ ‐$ ‐$ ‐$ 779$

502 Invest Corporate Funds 100% 500$ ‐$ ‐$ ‐$ ‐$ 500$

503 Manage Financial Reporting 100% 277$ ‐$ ‐$ ‐$ ‐$ 277$

504 IT Application, System, & Non‐Production Support 80% 15% 5% 14,000$ 11,200$ 2,100$ ‐$ 700$ ‐$

505 IT Asset Management 100% 667$ ‐$ ‐$ ‐$ ‐$ 667$

508 IT Configuration, Change & Release Management 100% 1,491$ ‐$ ‐$ ‐$ ‐$ 1,491$

510 IT Event Management 100% 178$ ‐$ ‐$ ‐$ ‐$ 178$

511 IT Incident Management 60% 30% 5% 5% 4,478$ 2,687$ 1,343$ 224$ 224$ ‐$

512 IT Information Security Management 100% 1,866$ ‐$ ‐$ ‐$ ‐$ 1,866$

513 IT Problem & Risk Lifecycle Management 60% 30% 5% 5% 837$ 502$ 251$ 42$ 42$ ‐$

519 Provision and Manage Access 100% 561$ ‐$ ‐$ ‐$ ‐$ 561$

520 Manage Facilities, Physical Security, & Safety 100% 1,739$ ‐$ ‐$ ‐$ ‐$ 1,739$

521 Facilities Incident Management 100% 4$ ‐$ ‐$ ‐$ ‐$ 4$

522 Corporate Incident Response & Disaster Recovery 100% 19$ ‐$ ‐$ ‐$ ‐$ 19$

523 Manage Business Continuity Plan 100% 3,101$ ‐$ ‐$ ‐$ ‐$ 3,101$

528 Procurement & Vendor Management 100% 804$ ‐$ ‐$ ‐$ ‐$ 804$

529 Provide Legal Advice 100% 3,936$ ‐$ ‐$ ‐$ ‐$ 3,936$

530 Manage Dispute Resolution 100% 63$ ‐$ ‐$ ‐$ ‐$ 63$

533 Manage Evidence Review / Audit 100% 130$ ‐$ ‐$ ‐$ ‐$ 130$

535 Tariff Controls Monitoring 100% 421$ ‐$ ‐$ ‐$ ‐$ 421$

536 Manage Internal Audit 100% 1,898$ ‐$ ‐$ ‐$ ‐$ 1,898$

537 Monitor Markets 80% 20% 1,987$ 1,590$ ‐$ 397$ ‐$ ‐$

538 Manage Tariff Rules Violations 100% 49$ ‐$ ‐$ ‐$ ‐$ 49$

543 Market Design 100% 358$ ‐$ ‐$ ‐$ ‐$ 358$

544 Maintain DMM Database 100% 1,330$ ‐$ ‐$ ‐$ ‐$ 1,330$

545 Manage Business Process & Continuous Improvement 100% 242$ ‐$ ‐$ ‐$ ‐$ 242$

546 Records Management 100% 218$ ‐$ ‐$ ‐$ ‐$ 218$

548


Implementation 100% 96$ ‐$ ‐$ ‐$ ‐$ 96$

549 Manage Compliance Investigations 100% 176$ ‐$ ‐$ ‐$ ‐$ 176$

550 Manage NERC Compliance 100% 1,851$ ‐$ ‐$ ‐$ ‐$ 1,851$

552 IT Reports & Documentation 100% ‐$ ‐$ ‐$ ‐$ ‐$ ‐$

553 Manage Vulnerability Remediation 100% 2$ ‐$ ‐$ ‐$ ‐$ 2$

554 Monitor & Maintain Backups 100% 42$ ‐$ ‐$ ‐$ ‐$ 42$

555 Manage Root Cause Analysis 100% 428$ ‐$ ‐$ ‐$ ‐$ 428$

Total SBS 44,528$ 15,979$ 3,694$ 663$ 966$ 23,226$

‐


539 Representing the ISO 100% 1,153$ ‐$ ‐$ ‐$ ‐$ 1,153$

601 Manage Client Inquiries 80% 10% 5% 5% 1,646$ 1,317$ 165$ 82$ 82$ ‐$

602 Account Management 80% 10% 5% 5% 718$ 574$ 72$ 36$ 36$ ‐$

603 Manage Stakeholder Processes 80% 10% 5% 5% 957$ 765$ 96$ 48$ 48$ ‐$

609 Manage External Affairs 100% 4,929$ ‐$ ‐$ ‐$ ‐$ 4,929$

610 Manage Communications & Public Relations 100% 1,796$ ‐$ ‐$ ‐$ ‐$ 1,796$

Total SCS 11,199$ 2,656$ 333$ 166$ 166$ 7,878$

‐

Total Direct O&M 151,611$ 45,075$ 47,608$ 1,960$ 9,264$ 47,704$

Direct O&M % 100% 30% 31% 1% 6% 32%


GMC GMC

Finance/FPP of 67

ABC INDIRECT ACTIVITIES

The same process yielded the following percentages for the indirect activities.

Table 20 — Allocation of Division Hours to Indirect Operating Activities

These costs were inputs into the allocation matrix shown in Table 8 — Mapping of ABC Indirect Activities

to Cost Categories to get the costs to the cost categories.

Table 21 — Allocation of Division Costs to Indirect Operating Activities

For indirect activities, the costs were aggregated and allocated as shown in Table 8 — Mapping of ABC

Indirect Activities to Cost Categories.

Table 22 — Allocation of ABC Indirect Activity Costs to Cost Categories

ABC

Process


Corporate

Services

Market and

Infrastructure


General

Counsel

Market

Quality

and

California

Regulatory

Affairs

External and

Customer

Affairs Total

Indirect

80003 Manage Human Capabilities 97% 0% 1% 1% 0% 0% 0% 100%


ABC

Process


Corporate

Services

Market and

Infrastructure


General

Counsel

Market

Quality

and

California

Regulatory

Affairs

External and

Customer

Affairs Total

Indirect

80003 Manage Human Capabilities 3,286$ 9$ 45$ 21$ 45$ 13$ 1$ 3,420$

Allocation of Costs By Division ($ in thousands)

2019 Modified Revenue Requirement: ABC Indirect Costs

Component

Market

Services

System

Operations

CRR

Services

Reliability


2019

Budget

Market

Services

System

Operations

CRR

Services

Reliability


ABC Indirect Costs80003: Manage Human Capabilities (MHC) 100% 3,420$ $ ‐ $ ‐ $ ‐ $ ‐ 3,420$

Total ABC Indirect Costs 3,420$ ‐$ ‐$ ‐$ 3,420$


GMC GMC

Finance/FPP of 67

Step 3: Allocating Remaining Revenue Requirement Components to Cost Categories

DEBT SERVICE AND CASH FUNDED CAPITAL

The allocation of costs is based on the percentage allocation in Table 9 — Mapping of Debt Service and

Capital to Cost Categories.

Table 23 — Allocation of Debt Service and Cash Funded Capital to Cost Categories

OTHER REVENUE

The components of other revenue were reviewed and all revenues allocated pursuant to Table 10 —

Mapping of Other Revenue to Cost Categories.

Table 24 — Allocation of Other Revenue to Cost Categories

2019 Modified Revenue Requirement: Debt Service Bonds and Cash Funded Capital

Component

Market

Services

System

Operations

CRR

Services

Reliability


2019

Budget

Market

Services

System

Operations

CRR

Services

Reliability


Debt Service Bonds 100% $ 16,904 $ ‐ $ ‐ $ ‐ $ ‐ $ 16,904

Cash Funded Capital 100% $ 25,000 $ ‐ $ ‐ $ ‐ $ ‐ $ 25,000


GMC GMC

2019 Modified Revenue Requirement: Other Costs and Revenues

Component

Market

Services

System

Operations

CRR

Services

Reliability


2019

Budget

Market

Services

System

Operations

CRR

Services

Reliability



California‐Oregon Intertie Path Operator Fees 100% $ 2,000 ‐$ 2,000$ ‐$ ‐$ ‐$

Energy Imbalance Market Administration Charges 100% 8,600$ ‐$ ‐$ ‐$ ‐$ 8,600$

Interest Earnings 100% $ 3,300 ‐$ ‐$ ‐$ ‐$ 3,300$

Intermittent Resource Forecasting Fees 80% 15% 5% $ 3,800 3,040$ 570$ ‐$ 190$ ‐$

Generator Interconnection Project Fees and Application Fees 100% $ 1,600 ‐$ 1,600$ ‐$ ‐$ ‐$

HANA Administrative Fees* 100% $ 1,080 ‐$ ‐$ ‐$ 1,080$ ‐$

Metered Sub‐Station Penalties 100% $ 175 ‐$ ‐$ ‐$ ‐$ 175$

Planning Coordinator Fees 100% $ 70 ‐$ 70$ ‐$ ‐$ ‐$

SC Application Fees 100% $ 80 ‐$ ‐$ ‐$ ‐$ 80$

Sub‐Total (without RC Funding Requirement) $ 20,705 3,040$ 4,240$ ‐$ 1,270$ 12,155$

Reliability Coordinator Funding Requirement* 100% $ 17,957 ‐$ ‐$ ‐$ 17,957$ ‐$

Total Other Costs and Revenue 38,662$ 3,040$ 4,240$ ‐$ 19,227$ 12,155$


* Modifications were made to the 2019 Revenue Requirement to include HANA Administrative Fees and a full year's worth of Reliability Coordinator Funding Requirement as these services were not or partially included in the original 2019

Revenue Requirement. As a reminder, the CAISO began offering Reliability Coordinator services July 1, 2019.


GMC GMC

Finance/FPP of 67

OPERATING COST RESERVE ADJUSMENT

The components of the operating cost reserve adjustment were reviewed and allocated pursuant to Table

11 — Mapping of Operating Cost Reserve Adjustment to Cost Categories.

Table 25 — Allocation of Operating Cost Reserve Adjustment to Cost Categories

Step 4: Aggregating Revenue Requirement into Cost Categories

The individual revenue requirements were aggregated and indirect costs allocated based on total direct

costs.

The reliability coordinator costs, which represent 9% of revenue requirement prior to the RC funding

requirement adjustment, were offset by the reliability coordinator funding requirement. The remaining balance

represents the GMC revenue requirement to be collected through the GMC rates and fees.

2019 Modified Revenue Requirement: Operating Cost Reserve Adjustment

Component

Market

Services

System

Operations

CRR

Services

Reliability


2019

Budget

Market

Services

System

Operations

CRR

Services

Reliability


Operating Cost Reserve Adjustment

Adjustment in 15% Reserve for O&M 100% $ (1,580) $ ‐ $ ‐ $ ‐ $ ‐ $ (1,580)

25% Debt Service Reserve for 2013 Bonds 100% 3,400$ ‐$ ‐$ ‐$ ‐$ 3,400$

Revenue Changes 100% $ 7,122 $ ‐ $ ‐ $ ‐ $ ‐ $ 7,122

Expense Changes 100% 4,538$ ‐$ ‐$ ‐$ ‐$ 4,538$

Total Operating Cost Reserve Adjustment 13,480$ ‐$ ‐$ ‐$ ‐$ 13,480$


GMC GMC

Finance/FPP of 67

Table 26 — Allocation of Revenue Requirement to Cost Categories

Step 5: Calculation of 2019 Rates Using New Cost Category Percentages

Although not necessary to determine the cost category percentages, the rates are needed to determine

the EIM fee. The GMC rates were determined by first estimating fees as shown in the following table

Table 27 — Estimation of Fee Revenue and Mapping of Fees to Cost Categories

2019 Modified Revenue Requirement

Component

2019

Budget

Market

Services

System

Operations

CRR

Services

Reliability


Direct Costs 151,611$ 45,075$ 47,608$ 1,960$ 9,264$ 47,704$

Indirect Costs 3,420$ ‐$ ‐$ ‐$ ‐$ 3,420$

Non‐ABC Costs 33,999$ 1,606$ 566$ 44$ 1,140$ 30,643$

Total O&M 189,030$ 46,681$ 48,174$ 2,004$ 10,404$ 81,767$

Debt Service 16,904$ ‐$ ‐$ ‐$ ‐$ 16,904$

Cash Funded Capital 25,000$ ‐$ ‐$ ‐$ ‐$ 25,000$

Total Debt Service and Capital 41,904$ ‐$ ‐$ ‐$ ‐$ 41,904$

Other Costs and Revenues (without RC Funding Requirement) (20,705)$ (3,040)$ (4,240)$ ‐$ (1,270)$ (12,155)$

Operating Cost Reserve Adjustment (13,480)$ ‐$ ‐$ ‐$ ‐$ (13,480)$

Total Other Revenue and Operating Costs Reserve Adj (34,185)$ (3,040)$ (4,240)$ ‐$ (1,270)$ (25,635)$

Revenue Requirement Sub‐Total Before Indirect Allocations 196,749$ 43,641$ 43,934$ 2,004$ 9,134$ 98,036$ Direct Costs % 44% 45% 2% 9%

Indirect Costs Allocated Based on Direct Cost % 43,136 44,116 1,961 8,823 (98,036)

Revenue Requirement Sub‐Total Before RC Funding Requirement Adjustment 196,749$ 86,777$ 88,050$ 3,965$ 17,957$ ‐$ RC Funding Percentage 44% 45% 2% 9%

Reliability Coordinator Funding Requirement (17,957)$ ‐$ ‐$ ‐$ (17,957)$ ‐$

GMC Revenue Requirement 178,792$ 86,777$ 88,050$ 3,965$ ‐$ ‐$ Cost Category Percentages for GMC Rates 49% 49% 2%


GMC

Finance/FPP of 67

The estimated fees were then deducted from the revenue requirement resulting in the remaining revenue

requirement to be collected. The remaining amount to be collected is divided by the estimated volumes of billing

determinants for each cost category in order to determine the respective rates.

Table 28 — 2019 GMC Rates Using Revised Cost Category Percentages

Finance/FPP of 67

Summary of GMC Cost Category Percentage Changes

The following table reflects the results of the cost of service analysis. The new percentages specified

below will go into effect in January 1, 2021.

Table 29 — Summary of GMC Cost Category Percentage Changes

Cost

Category

2016 Study

Effective

2018 GMC

2019 Study

Effective

2021 GMC

Increase /

(Decrease)

from Prior

Market Services 32% 49% 17%

System Operations 66% 49% ‐17%

CRR Services 2% 2% 0%

Finance/FPP of 67

Energy Imbalance Market

The EIM provides entities with the opportunity to leverage CAISO’s existing real time market platform to

facilitate five-minute economic dispatch. The EIM provides reliability and economic benefits to both existing

market participants and new EIM entities by utilizing CAISO’s 15-minute market and real time dispatch. The EIM

relies on CAISO’s existing real time portion of the market services activities and system operations activities.

Conceptually, EIM participants will pay the same rate as existing customers but only for the real time

market and real time dispatch activities specifically related to EIM. To determine the updated EIM fee, using the

2019 cost of service study, CAISO identified and aggregated the real time activity costs allocated to the two main

cost categories – market services and system operations. The CAISO then allocated indirect costs to the

categories based on the proportion to direct costs. The respective real time cost proportions were then applied to

the respective rates for market services and system operations.

The costs include the EIM share of all components of the revenue requirement such that EIM participants

will pay the same rate as existing customers for the real time activities they are using.

Application of ABC to EIM Rate Structure

As noted earlier, the ABC analysis disaggregated CAISO’s primary business functions into nine core

processes (level 1 activities). Each core activity was then divided into major processes (level 2 activities) which

were mapped to the corresponding level 1 activity. The first step was to allocate the two cost category activities to

the corresponding real time components. The market services component relates to either the real time market or

the day ahead market. The system operations component relates to either real time dispatch or balancing

authority services.

Mapping of Cost Categories to EIM Activities

Market services’ real time market and system operations’ real time dispatch activities are mapped to the

EIM rate structure. These activities are defined, linked to specific processes, and measured using the 12

standard percentage allocations presented in Table 6 – Mapping of ABC Direct Operating Activities to Cost

Finance/FPP of 67

Categories. If the activity was identified as indirect or the attribute was not distinguishable to any specific

category, it was not included in the initial steps of the allocation process but rather allocated at the end of the

process based on percentages of direct allocable costs.

MARKET SERVICES

The following mapping only addresses those level 2 activities that are mapped to market services, which

then in turn were mapped to either the real time market or the day ahead market. The direct ABC level 2 activities

mapped to market services is taken from Table 6 – Mapping of ABC Direct Operating Activities to Cost

Categories.

Table 30 — Mapping of Market Services ABC Direct Operating Activities

Real Time

Market

Day Ahead

Market Comments

100% Efforts support real time market functions.

100% Efforts support day ahead market functions.

50% 50%

Efforts support real time market and day ahead market

functions equally.

80% 20% Efforts predominately support real time market functions.

20% 80% Efforts predominately support day ahead market functions.

(% of cost to allocate to category)

Market Services Split

Finance/FPP of 67



Market

Services

Real Time

Market

Day Ahead

Market Comments


201 Develop and Monitor Regulatory Contract Procedures 95% 50% 50%

Efforts support real time market and day ahead market functions

equally.


229 Develop State / Federal Regulatory Policy 40% 50% 50%


equally.

230 BPM Change Management 80% 50% 50%


equally.

231 Develop Infrastructure Policy 40% 50% 50%


equally.

232 Perform Market Analysis 80% 80% 20% Efforts predominately support real time market functions.

233 Develop Market Design 100% 50% 50%


equally.

234 Manage Regulatory Contract Negotiations 95% 50% 50%


equally.


301 Manage Full Network Model Maintenance 45% 50% 50%


equally.

304 EMAA Telemetry 50% 100% Efforts support real time market functions.



equally.

309 Resource Management 50% 80% 20% Efforts predominately support real time market functions.

320 Provide Stakeholder Training 60% 50% 50%


equally.

321 Schedule Coordinator Management 45% 80% 20% Efforts predominately support real time market functions.

322 Register, Modify and Terminate PDR Resource 100% 50% 50%


equally.

323 Calculate & Monitor Energy Costs & Indices 60% 80% 20% Efforts predominately support real time market functions.


352 Manage Day Ahead Market Support 95% 100% Efforts support day ahead market functions.

353 Operations Real Time Support 80% 100% Efforts support real time market functions.

355 Outage Model & Management 5% 50% 50%


equally.

360 Real Time Operations 20% 100% Efforts support real time market functions.

362 Manage Operations Engineering Support 15% 50% 50%


equally.

368 Manage Day Ahead and Market Operations 100% 50% 50%


equally.

category % allocation


Finance/FPP of 67



Market

Services

Real Time

Market

Day Ahead

Market Comments


401 Perform Market Validation 80% 80% 20% Efforts predominately support real time market functions.

402 Manage Dispute Analysis & Resolution 100% 80% 20% Efforts predominately support real time market functions.

403 Manage Market Quality System 50% 80% 20% Efforts predominately support real time market functions.

409 Meter Data Acquisition and Processing 100% 50% 50%


equally.

411 Manage Market Clearing 45% 50% 50%


equally.

412 Manage Market Billing & Settlements 45% 80% 20% Efforts predominately support real time market functions.

414 Manage Settlements Quarterly Release Cycle 45% 80% 20% Efforts predominately support real time market functions.

417 Perform Market Report 80% 80% 20% Efforts predominately support real time market functions.

418 Manage Good Faith Negotiation Requests 100% 50% 50%


equally.

419 Manage Price Corrections 50% 80% 20% Efforts predominately support real time market functions.


455 Manage Technology Collaboration (Internal) 100% 80% 20% Efforts predominately support real time market functions.

462 Manage Technology Collaboration (External) 100% 50% 50%


equally.




equally.

511 IT Incident Management 60% 50% 50%


equally.

513 IT Problem & Risk Lifecycle Management 60% 50% 50%


equally.

537 Monitor Markets 80% 50% 50%


equally.


539 Representing the ISO

601 Manage Client Inquiries 80% 80% 20% Efforts predominately support real time market functions.

602 Account Management 80% 80% 20% Efforts predominately support real time market functions.

603 Manage Stakeholder Processes 80% 20% 80% Efforts predominately support day ahead market functions.


Finance/FPP of 67

The market services related non-ABC support costs were mapped from Table 7 – Mapping of Non-ABC

Support Costs to Cost Categories.

Table 31 — Mapping of Market Services Non-ABC Support Costs

Then other revenue mapped to market services from Table 10 – Mapping of Other Revenue to Cost

Categories were mapped to real time market and / or day ahead market.

Table 32 — Mapping of Market Services Other Revenue

Market services fees from Table 27 – Estimation of Fee Revenue and Mapping of Fees to Cost

Categories are mapped as follows.

Table 33 — Mapping of Market Services Fees

2019 Modified Revenue Requirement: Non‐ABC Support

Component

Market

Services

Real Time

Market

Day Ahead

Market Comments



SSAE 16 Audit 45% 80% 20% Use Process 80007, Task 412 allocations.


Market Surveillance Committee 80% 80% 20% Use Process 80002, Task 232 allocations.


Intermittent Resource Forecasting Costs 80% 100% Use Process 80005, Task 353 allocations.







Component

Market

Services

Real Time

Market

Day Ahead

Market Comments


Intermittent Resource Forecasting Fees 80% 100% Use Process 80005, Task 353 allocations.



Fee

Market

Services

Real Time

Market

Day Ahead

Market Comments

Bid Segment Fees 100% 50% 50% Bidding in both markets.

Inter‐SC Trade Fees 100% 100% All in forward market.

SCID Fees 100% 50% 50% Participate in both markets.



Finance/FPP of 67

SYSTEM OPERATIONS

The following mapping only addresses those level 2 activities that are mapped to system operations,

which then in turn were mapped to either the real time dispatch or balancing authority (BA) services. The direct

ABC level 2 activities mapped to system operations is taken from Table 6 – Mapping of ABC Direct Operating

Activities to Cost Categories.

Table 34 — Mapping of System Operations ABC Direct Operating Activities

Real Time

Dispatch

Balancing

Authority

Services Comments

100% Efforts support real time dispatch functions.

100% Efforts support balancing authority services functions.

50% 50%

Efforts support real time dispatch and balancing authority

services functions equally.

80% 20% Efforts predominately support real time dispatch functions.

20% 80%

Efforts predominately support balancing authority services

functions.


System Operations Split

Finance/FPP of 67



System

Operations

Real Time

Dispatch

BA

Services Comments


202 Manage Generator Interconnection Agreements 100% 100% Efforts support balancing authority functions.

203 Manage Generator Interconnection Process 100% 100% Efforts support balancing authority functions.

204 Manage Long Term Transmission Planning 100% 100% Efforts support balancing authority functions.

205 Manage New Transmission Resources 95% 100% Efforts support balancing authority functions.

206 Manage Transmission Maintenance Standards 100% 100% Efforts support balancing authority functions.

207 Manage Load Resource Data 100% 100% Efforts support balancing authority functions.

208 Seasonal Assessment 100% 100% Efforts support balancing authority functions.

209 Manage Queue Management 100% 100% Efforts support balancing authority functions.

210 Manage Annual Delivery Assessment 100% 100% Efforts support balancing authority functions.


229 Develop State / Federal Regulatory Policy 60% 100% Efforts support balancing authority functions.

230 BPM Change Management 10% 100% Efforts support real time dispatch functions.

231 Develop Infrastructure Policy 60% 100% Efforts support balancing authority functions.

232 Perform Market Analysis 15% 100% Efforts support real time dispatch functions.


301 Manage Full Network Model Maintenance 45% 100%

Efforts support real time dispatch functions as the grid operates

in real time.

302 Plan & Develop Operations Simulator Training 95% 100%

Efforts support real time dispatch functions as the grid operates

in real time.

304 EMAA Telemetry 50% 20% 80% Efforts predominately support balancing authority functions.



functions equally.

309 Resource Management 50% 50% 50%


functions equally.

310 Manage Reliability Requirements 100% 100% Efforts support balancing authority functions.

311 Manage Operations Planning 95% 20% 80% Efforts predominately support balancing authority functions.

312 Manage WECC Studies 100% 20% 80% Efforts predominately support balancing authority functions.

314 Manage & Facilitate Procedure Maintenance 95% 20% 80% Efforts predominately support balancing authority functions.

316 Plan & Develop Operations Training 95% 100% Efforts support real time dispatch functions.

317 Execute & Track Operations Training 95% 100% Efforts support real time dispatch functions.

320 Provide Stakeholder Training 30% 50% 50%


functions equally.

321 Schedule Coordinator Management 45% 20% 80% Efforts predominately support balancing authority functions.

323 Calculate & Monitor Energy Costs & Indices 35% 100% Efforts support real time dispatch functions.



Finance/FPP of 67



System

Operations

Real Time

Dispatch

BA

Services Comments


353 Operations Real Time Support 15% 100% Efforts support real time dispatch functions.

355 Outage Model & Management 60% 20% 80% Efforts predominately support balancing authority functions.

360 Real Time Operations 80% 50% 50%


functions equally.

362 Manage Operations Engineering Support 80% 100% Efforts support real time dispatch functions.

367 Manage Operations Compliance & Event Analysis 50% 100% Efforts support balancing authority functions.


401 Perform Market Validation 20% 100% Efforts support real time dispatch functions.

403 Manage Market Quality System 40% 100% Efforts support real time dispatch functions.

411 Manage Market Clearing 45% 50% 50%


functions equally.

412 Manage Market Billing & Settlements 45% 100% Efforts support real time dispatch functions.

413 Manage Reliability Must Run Settlements 100% 100% Efforts support real time dispatch functions.

414 Manage Settlements Quarterly Release Cycle 45% 100% Efforts support real time dispatch functions.

417 Perform Market Report 20% 100% Efforts support real time dispatch functions.

419 Manage Price Corrections 40% 100% Efforts support real time dispatch functions.




functions equally.

511 IT Incident Management 30% 100% Efforts support real time dispatch functions.

513 IT Problem & Risk Lifecycle Management 30% 100% Efforts support real time dispatch functions.


601 Manage Client Inquiries 10% 100% Efforts support real time dispatch functions.

602 Account Management 10% 100% Efforts support real time dispatch functions.

603 Manage Stakeholder Processes 10% 100% Efforts support real time dispatch functions.



Finance/FPP of 67

The system operations related non-ABC support costs were mapped from Table 7 – Mapping of Non-

ABC Support Costs to Cost Categories.

Table 35 — Mapping of System Operations Non-ABC Support Costs

Then other revenue mapped to system operations from Table 10 – Mapping of Other Revenue to Cost

Categories were allocated to real time dispatch and / or balancing authority services.

Table 36 — Mapping of System Operations Other Revenue

System operations fees from Table 27 – Estimation of Fee Revenue and Mapping of Fees to Cost

Categories were mapped as follows.

Table 37 — Mapping of System Operations Fees


Component

System

Operations

Real Time

Dispatch

BA

Services Comments



SSAE 16 Audit 45% 100% Use Process 80007, Task 412 allocations.


Market Surveillance Committee 15% 100% Use Process 80002, Task 232 allocations.








% of budget allocation


Component

System

Operations

Real Time

Dispatch

BA

Services Comments


California‐Oregon Intertie Path Operator Fees 100% 100% Fees offset system operations costs.

Intermittent Resource Forecasting Fees 15% 100% Use Process 80005, Task 353 allocations.

Generator Interconnection Project Fees and Application Fees 100% 100% Use Process 80001, Task 203 allocations.

Planning Coordinator Fees 100% 100% Use Process 80001, Task 204 allocations.




Fee

System

Operations

Real Time

Dispatch

Balancing

Authority

Services Comments

TOR Fees 100% 100% Real time function.



Finance/FPP of 67

Costing the Cost Categories to EIM Activities

The amounts from the 2019 cost of service study were applied to the market services and system

operations categories to derive the direct real time activity costs.

Table 38 – Components of the 2019 Modified GMC Revenue Requirement

Completing the analysis required the following steps:

1. applying EIM activity percentages to non-ABC O&M support costs;

2. applying EIM activity percentages to ABC direct O&M costs;

3. applying EIM activity percentages to other revenue;

4. aggregating costs and allocate indirect costs to EIM activities based on percentage of direct costs and

allocation of fees to EIM activities to determine the resulting EIM activity amounts and percentages; and

5. applying the EIM activity percentage to the applicable cost category (market services and / or system

operations) to determine the EIM component.


Component Budget

Market

Services

System

Operations

CRR

Services

Non‐ABC O&M Support Costs 33,999$ 1,606$ 566$ 44$

Direct ABC O&M Costs 151,611$ 45,075$ 47,608$ 1,960$

Debt Service 16,904$ ‐$ ‐$ ‐$

Cash Funded Capital 25,000$ ‐$ ‐$ ‐$

Other Costs and Revenues (38,662)$ (3,040)$ (4,240)$ ‐$

Operating Costs Reserve Adjustment (13,480)$ ‐$ ‐$ ‐$

Subtotal 175,372$ 43,641$ 43,934$ 2,004$

Indirect Costs 3,420$ 43,136$ 44,116$ 1,961$

GMC Revenue Requirement Before Fees 178,792$ 86,777$ 88,050$ 3,965$

Less Fees (8,560)$ (6,725)$ (1,105)$ (730)$

Remaining Revenue Requirement to Collect 170,232$ 80,052$ 86,945$ 3,235$

Finance/FPP of 67

Step 1: Applying EIM Activity Percentages to Non‐ABC O&M Support Costs

The non-ABC support costs from Table 14 – Allocation of Non-ABC Support to Cost Categories were

allocated using the percentages shown in the Mapping of Non-ABC Support Costs tables above (Table 31 and

Table 35).

Table 39 – Allocation of Market Services Non-ABC Support Costs


Component

Market

Services

Real Time

Market

Day Ahead

Market

Category

Budget

Real Time

Market

Day Ahead

Market



SSAE 16 Audit 45% 80% 20% 252$ 202$ 50$

Corporate Services Division Total 252$ 202$ 50$


Market Surveillance Committee 80% 80% 20% 251$ 201$ 50$

MID Total 251$ 201$ 50$


Intermittent Resource Forecasting Costs 80% 100% 789$ 789$ ‐$

Technology Total 789$ 789$ ‐$



MQCRA Total 284$ 284$ ‐$


Operations Audit 24% 72% 28% 30$ 22$ 8$

General Counsel Total 30$ 22$ 8$

Total Non‐ABC Support Costs 1,606$ 1,498$ 108$


Market Services Split Market Services Split


Finance/FPP of 67

Table 40 – Allocation of System Operations Non-ABC Support Costs

Step 2: Applying EIM Activity Percentages to ABC Direct O&M Costs

The ABC direct O&M costs from Table 19 – Allocation of ABC Direct Operating Activities to Cost

Categories were allocated using the percentages shown in the Mapping of ABC Direct Operating Activities tables

above (Table 30 and Table 34).


Component

System

Operations

Real Time

Dispatch

BA

Services

Category

Budget

Real Time

Dispatch

BA

Services



SSAE 16 Audit 45% 100% 252$ 252$ ‐$

Corporate Services Division Total 252$ 252$ ‐$


Market Surveillance Committee 15% 100% 47$ 47$ ‐$

MID Total 47$ 47$ ‐$



Technology Total 148$ 148$ ‐$



MQCRA Total 53$ 53$ ‐$

General Counsel Division (GC) ‐$

Operations Audit 52% 58% 42% 66$ 38$ 28$

General Counsel Total 66$ 38$ 28$

Total Non‐ABC Support Costs 566$ 538$ 28$


System Operations Split System Operations Split


Finance/FPP of 67

Table 41 – Allocation of Market Services ABC Direct Operating Costs



Market

Services

Real Time

Market

Day Ahead

Market

Category

Budget

Real Time

Market

Day Ahead

Market


201 Develop and Monitor Regulatory Contract Procedures 95% 50% 50% 612$ 306$ 306$

Total DI 612$ 306$ 306$


229 Develop State / Federal Regulatory Policy 40% 50% 50% 127$ 64$ 63$

230 BPM Change Management 80% 50% 50% 151$ 76$ 75$

231 Develop Infrastructure Policy 40% 50% 50% 923$ 462$ 461$

232 Perform Market Analysis 80% 80% 20% 2,638$ 2,110$ 528$

233 Develop Market Design 100% 50% 50% 1,904$ 952$ 952$

234 Manage Regulatory Contract Negotiations 95% 50% 50% 349$ 175$ 174$

Total DM 6,092$ 3,839$ 2,253$


301 Manage Full Network Model Maintenance 45% 50% 50% 1,735$ 868$ 867$

304 EMAA Telemetry 50% 100% 268$ 268$ ‐$

308 Manage Credit & Collateral 40% 50% 50% 313$ 157$ 156$

309 Resource Management 50% 80% 20% 669$ 535$ 134$

320 Provide Stakeholder Training 60% 50% 50% 463$ 232$ 231$

321 Schedule Coordinator Management 45% 80% 20% 87$ 70$ 17$

322 Register, Modify and Terminate PDR Resource 100% 50% 50% 174$ 87$ 87$

323 Calculate & Monitor Energy Costs & Indices 60% 80% 20% 599$ 479$ 120$

Total MMR 4,308$ 2,696$ 1,612$


352 Manage Day Ahead Market Support 95% 100% 361$ ‐$ 361$

353 Operations Real Time Support 80% 100% 865$ 865$ ‐$

355 Outage Model & Management 5% 50% 50% 128$ 64$ 64$

360 Real Time Operations 20% 100% 2,611$ 2,611$ ‐$

362 Manage Operations Engineering Support 15% 50% 50% 602$ 301$ 301$

368 Manage Day Ahead and Market Operations 100% 50% 50% 2,474$ 1,237$ 1,237$

Total MMG 7,041$ 5,078$ 1,963$

MMG %s 100% 72% 28%

category % allocation budget allocations (amounts in thousands)

Market Services SplitMarket Services Split

Finance/FPP of 67



Market

Services

Real Time

Market

Day Ahead

Market

Category

Budget

Real Time

Market

Day Ahead

Market

Category

Budget

Real Time

Dispatch

BA

Services


401 Perform Market Validation 80% 80% 20% 19$ 15$ 4$ 5$ 5$ ‐$

402 Manage Dispute Analysis & Resolution 100% 80% 20% 1,475$ 1,180$ 295$ ‐$ ‐$ ‐$

403 Manage Market Quality System 50% 80% 20% 287$ 230$ 57$ 229$ 229$ ‐$

409 Meter Data Acquisition and Processing 100% 50% 50% 474$ 237$ 237$ ‐$ ‐$ ‐$

411 Manage Market Clearing 45% 50% 50% 53$ 27$ 26$ 53$ 27$ 26$

412 Manage Market Billing & Settlements 45% 80% 20% 600$ 480$ 120$ 599$ 599$ ‐$

414 Manage Settlements Quarterly Release Cycle 45% 80% 20% 1,046$ 837$ 209$ 1,046$ 1,046$ ‐$

417 Perform Market Report 80% 80% 20% 759$ 607$ 152$ 190$ 190$ ‐$

418 Manage Good Faith Negotiation Requests 100% 50% 50% 40$ 20$ 20$ ‐$ ‐$ ‐$

419 Manage Price Corrections 50% 80% 20% 917$ 734$ 183$ 734$ 734$ ‐$

Total MOS 5,670$ 4,367$ 1,303$ 2,863$ 2,837$ 26$


455 Manage Technology Collaboration (Internal) 100% 80% 20% 2,570$ 2,056$ 514$ ‐$ ‐$ ‐$

462 Manage Technology Collaboration (External) 100% 50% 50% 147$ 74$ 73$ ‐$ ‐$ ‐$

Total PMB 2,717$ 2,130$ 587$ ‐$ ‐$ ‐$


504 IT Application, System, & Non‐Production Support 80% 50% 50% 11,200$ 5,600$ 5,600$ 2,100$ 1,050$ 1,050$

511 IT Incident Management 60% 50% 50% 2,687$ 1,344$ 1,343$ 1,343$ 1,343$ ‐$

513 IT Problem & Risk Lifecycle Management 60% 50% 50% 502$ 251$ 251$ 251$ 251$ ‐$

537 Monitor Markets 80% 50% 50% 1,590$ 795$ 795$ ‐$ ‐$ ‐$

Total SBS 15,979$ 7,990$ 7,989$ 3,694$ 2,644$ 1,050$


601 Manage Client Inquiries 80% 80% 20% 1,317$ 1,054$ 263$ 165$ 165$ ‐$

602 Account Management 80% 80% 20% 574$ 459$ 115$ 72$ 72$ ‐$

603 Manage Stakeholder Processes 80% 20% 80% 765$ 153$ 612$ 96$ 96$ ‐$

Total SCS 2,656$ 1,666$ 990$ 333$ 333$ ‐$

Total Direct O&M 45,075$ 28,072$ 17,003$ 47,608$ 22,157$ 25,451$

Direct O&M % 100% 62% 38% 100% 47% 53%

category % allocation budget allocations (amounts in thousands) budget allocations (amounts in thousands)

Market Services Split System Operations SplitMarket Services Split

Finance/FPP of 67

Table 42 – Allocation of System Operations ABC Direct Operating Costs



System

Operations

Real Time

Dispatch

BA

Services

Category

Budget

Real Time

Dispatch

BA

Services


202 Manage Generator Interconnection Agreements 100% 100% 319$ ‐$ 319$

203 Manage Generator Interconnection Process 100% 100% 2,765$ ‐$ 2,765$

204 Manage Long Term Transmission Planning 100% 100% 6,618$ ‐$ 6,618$

205 Manage New Transmission Resources 95% 100% 651$ ‐$ 651$

206 Manage Transmission Maintenance Standards 100% 100% 514$ ‐$ 514$

207 Manage Load Resource Data 100% 100% 247$ ‐$ 247$

208 Seasonal Assessment 100% 100% 284$ ‐$ 284$

209 Manage Queue Management 100% 100% 786$ ‐$ 786$

210 Manage Annual Delivery Assessment 100% 100% 1$ ‐$ 1$

Total DI 12,185$ ‐$ 12,185$


229 Develop State / Federal Regulatory Policy 60% 100% 190$ ‐$ 190$

230 BPM Change Management 10% 100% 19$ 19$ ‐$

231 Develop Infrastructure Policy 60% 100% 1,385$ ‐$ 1,385$

232 Perform Market Analysis 15% 100% 495$ 495$ ‐$

Total DM 2,089$ 514$ 1,575$


301 Manage Full Network Model Maintenance 45% 100% 1,734$ 1,734$ ‐$

302 Plan & Develop Operations Simulator Training 95% 100% 391$ 391$ ‐$

304 EMAA Telemetry 50% 20% 80% 269$ 54$ 215$

308 Manage Credit & Collateral 40% 50% 50% 313$ 157$ 156$

309 Resource Management 50% 50% 50% 668$ 334$ 334$

310 Manage Reliability Requirements 100% 100% 1,503$ ‐$ 1,503$

311 Manage Operations Planning 95% 20% 80% 1,789$ 358$ 1,431$

312 Manage WECC Studies 100% 20% 80% 80$ 16$ 64$

314 Manage & Facilitate Procedure Maintenance 95% 20% 80% 288$ 58$ 230$

316 Plan & Develop Operations Training 95% 100% 2,051$ 2,051$ ‐$

317 Execute & Track Operations Training 95% 100% 1,288$ 1,288$ ‐$

320 Provide Stakeholder Training 30% 50% 50% 232$ 116$ 116$

321 Schedule Coordinator Management 45% 20% 80% 88$ 18$ 70$

323 Calculate & Monitor Energy Costs & Indices 35% 100% 350$ 350$ ‐$

Total MMR 11,044$ 6,925$ 4,119$


System Operations SplitSystem Operations Split

Finance/FPP of 67



System

Operations

Real Time

Dispatch

BA

Services

Category

Budget

Real Time

Dispatch

BA

Services


353 Operations Real Time Support 15% 100% 162$ 162$ ‐$

355 Outage Model & Management 60% 20% 80% 1,535$ 307$ 1,228$

360 Real Time Operations 80% 50% 50% 10,444$ 5,222$ 5,222$

362 Manage Operations Engineering Support 80% 100% 3,213$ 3,213$ ‐$

367 Manage Operations Compliance & Event Analysis 50% 100% 46$ ‐$ 46$

Total MMG 15,400$ 8,904$ 6,496$

MMG %s 100% 58% 42%


401 Perform Market Validation 20% 100% 5$ 5$ ‐$

403 Manage Market Quality System 40% 100% 229$ 229$ ‐$

411 Manage Market Clearing 45% 50% 50% 53$ 27$ 26$

412 Manage Market Billing & Settlements 45% 100% 599$ 599$ ‐$

413 Manage Reliability Must Run Settlements 100% 100% 7$ 7$ ‐$

414 Manage Settlements Quarterly Release Cycle 45% 100% 1,046$ 1,046$ ‐$

417 Perform Market Report 20% 100% 190$ 190$ ‐$

419 Manage Price Corrections 40% 100% 734$ 734$ ‐$

Total MOS 2,863$ 2,837$ 26$


504 IT Application, System, & Non‐Production Support 15% 50% 50% 2,100$ 1,050$ 1,050$

511 IT Incident Management 30% 100% 1,343$ 1,343$ ‐$

513 IT Problem & Risk Lifecycle Management 30% 100% 251$ 251$ ‐$

Total SBS 3,694$ 2,644$ 1,050$


601 Manage Client Inquiries 10% 100% 165$ 165$ ‐$

602 Account Management 10% 100% 72$ 72$ ‐$

603 Manage Stakeholder Processes 10% 100% 96$ 96$ ‐$

Total SCS 333$ 333$ ‐$

Total Direct O&M 47,608$ 22,157$ 25,451$

Direct O&M % 100% 47% 53%


System Operations SplitSystem Operations Split

Finance/FPP of 67

Step 3: Allocating the Remaining Revenue Requirement Components

The other revenue from Table 24 – Allocation of Other Revenue to Cost Categories were allocated using

the percentages shown in the Mapping of Other Revenue tables above (Table 32 and Table 36).

Table 43 — Allocation of Market Services Other Revenue

Table 44 — Allocation of System Operations Other Revenue

Step 4: Aggregating Revenue Requirement into Cost Categories and Allocating Fees

The CAISO aggregated individual revenue requirements for each category, indirect costs were allocated

based on the total of direct costs and fees were allocated as described above.


Component

Market

Services

Real Time

Market

Day Ahead

Market

Category

Budget

Real Time

Market

Day Ahead

Market


Intermittent Resource Forecasting Fees 80% 100% $ 3,040 3,040$ ‐$


Market Services Split Market Services Split


Component

System

Operations

Real Time

Dispatch

BA

Services

Category

Budget

Real Time

Dispatch

BA

Services


California‐Oregon Intertie Path Operator Fees 100% 100% $ 2,000 ‐$ 2,000$

Intermittent Resource Forecasting Fees 15% 100% $ 570 570$ ‐$

Generator Interconnection Project Fees and Application Fees 100% 100% $ 1,600 ‐$ 1,600$

Planning Coordinator Fees 100% 100% $ 70 ‐$ 70$

Total Other Costs and Revenue 4,240$ 570$ 3,670$


System Operations Split System Operations Split


Finance/FPP of 67

Table 45 – Mapping Revenue Requirement to Cost Categories

Step 5: Calculation of the EIM Components of the 2019 Cost Category Rates

The percentages from Table 45 were applied to the cost categories’ real time component’s rate from

Table 28 – 2019 GMC Rates Using Revised Cost Category Percentages.

Table 46 – Calculation of the EIM Components


Component Budget

Market

Services

Real Time

Market

Day Ahead

Market

System

Operations

Real Time

Dispatch

BA

Services

Non‐ABC O&M Support Costs 33,999$ 1,606$ 1,498$ 108$ 566$ 538$ 28$

Direct ABC O&M Costs 151,611$ 45,075$ 28,072$ 17,003$ 47,608$ 22,157$ 25,451$

Debt Service 16,904$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$

Cash Funded Capital 25,000$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$

Other Costs and Revenues (38,662)$ (3,040)$ (3,040)$ ‐$ (4,240)$ (570)$ (3,670)$

Operating Costs Reserve Adjustment (13,480)$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$

Subtotal 175,372$ 43,641$ 26,530$ 17,111$ 43,934$ 22,125$ 21,809$

Indirect Costs 3,420$ 43,136$ 26,223$ 16,913$ 44,116$ 22,217$ 21,899$

GMC Revenue Requirement Before Fees 178,792$ 86,777$ 52,753$ 34,024$ 88,050$ 44,342$ 43,708$

Less Fees (8,560)$ (6,725)$ (2,179)$ (4,546)$ (1,105)$ (1,105)$ ‐$

Remaining Revenue Requirement to Collect 170,232$ 80,052$ 50,574$ 29,478$ 86,945$ 43,237$ 43,708$

63% 37% 50% 50%

System Operations SplitMarket Services Split

Cost

Category

Category

Net

Costs

Pro Forma

Rate

EIM

Real Time

Activity

EIM

Percentage

of

Costs

EIM

Cost

of Real Time

Activities

EIM

Pro Forma

Rate

($ in thousands) ($ / MWh) ($ in thousands) ($ / MWh)

Market Services 80,052$ 0.1498$ Real Time Market 63% 50,574$ 0.0947$

System Operations 86,945$ 0.1945$ Real Time Dispatch 50% 43,237$ 0.0967$

Finance/FPP of 67

Summary of EIM Cost Category Percentage Changes

A comparison of the EIM cost category percentages from the 2016 and 2019 cost of service studies is

shown highlighted below. As noted earlier, the study shows that 16% of market services’ resources shifted from

the real time market functions to day ahead market functions. In addition, 11% of system operations’ resources

shifted from balancing authority functions to real time dispatch functions. The driver of the shifts is a balancing of

efforts between the market services and system operations functions and responsibilities.

Table 47 – Summary of EIM Cost Category Percentage Changes

Cost

Category Sub‐Category

2016 Study

Effective

2018 GMC

2019 Study

Effective

2021 GMC

Increase /

(Decrease)

from Prior

Real Time Market 79% 63% ‐16%

Day Ahead Market 21% 37% 16%

Real Time Dispatch 39% 50% 11%

Balancing Authority 61% 50% ‐11%

Market Services

System Operations

Finance/FPP of 67

Reliability Coordinator Services

In January 2018, CAISO announced plans to become the RC for entities within its footprint and to offer

the service to all balancing authorities and transmission operators in the West. Shortly after, CAISO began a

public process to develop its RC services. In November 2018, FERC approved the rates, terms, and conditions

for the RC services. CAISO collaborated with entities, regulators, and other RC service providers to work toward

its certification, and to create procedures for logistics and operations. CAISO completed the NERC certification

process led by the Western Electricity Coordinating Council (WECC), allowing it to provide RC services. In the

first phase, RC West became the RC of record for 16 entities as of July 1, 2019. The November 1, 2019 cutover

marked the second phase of a transition of power grid oversight responsibility. RC West is now the RC for 42

entities in the Western Interconnection, overseeing 87 percent of the load in the western United States.

Most of the process and tasks necessary to support the RC services were already identified in CAISO’s

ABC process and task codes; however, they were not directly identified as a RC Services function. To address

this gap, beginning with the 2019 cost of service study, CAISO mapped the tasks identified as contributing to RC

services to a new cost category, Reliability Coordinator, by means of percentage allocation. This approach allows

CAISO to leverage against the stability of its annual revenue requirement to develop an annual RC funding

requirement thus benefiting both the RC customers and the existing GMC customers.

By mapping the tasks to the RC cost category, the CAISO is able to calculate the RC funding percentage.

The RC funding percentage represents the direct and indirect time and expense necessary for the CAISO to

perform its RC services and functions. The RC funding percentage is used similarly to that of the GMC cost

category percentages in that the RC funding percentage is multiplied against the revenue requirement in order to

determine the RC funding requirement. The RC funding requirement is then divided by the reported MWh to

determine the RC rate/MWh.

Finance/FPP of 67

Table 48: Allocation of Revenue Requirement to RC Cost Category

The mapping of RC services is included in the aforementioned sections’ tables. The culmination of the mapping

resulted in a 9% RC funding percentage. There is no change in the RC funding percentage from that of the initial calculation as

part of CAISO’s Reliability Coordinator Rate Design, Terms and Conditions proposal.

Table 49– Summary of RC Funding Percentage Changes

In addition to mapping the RC related efforts, CAISO revisited the tasks necessary to support load serving and

generator only entities. This effort required outreach to the various subject matter experts that support RC services such as from

the RC, Operations Planning and Operations Compliance groups. The general feedback was, whereas the number of

Cost

Category

2016 Modified

Study

Effective

2019 GMC

2019 Study

Effective

2021 GMC

Increase /

(Decrease)

from Prior

Reliability Coordinator Services 9% 9% 0%


Component

2019

Budget

Market

Services

System

Operations

CRR

Services

Reliability


Direct Costs 151,611$ 45,075$ 47,608$ 1,960$ 9,264$ 47,704$

Indirect Costs 3,420$ ‐$ ‐$ ‐$ ‐$ 3,420$

Non‐ABC Costs 33,999$ 1,606$ 566$ 44$ 1,140$ 30,643$

Total O&M 189,030$ 46,681$ 48,174$ 2,004$ 10,404$ 81,767$

Debt Service 16,904$ ‐$ ‐$ ‐$ ‐$ 16,904$

Cash Funded Capital 25,000$ ‐$ ‐$ ‐$ ‐$ 25,000$

Total Debt Service and Capital 41,904$ ‐$ ‐$ ‐$ ‐$ 41,904$

Other Costs and Revenues (without RC Funding Requirement) (20,705)$ (3,040)$ (4,240)$ ‐$ (1,270)$ (12,155)$

Operating Cost Reserve Adjustment (13,480)$ ‐$ ‐$ ‐$ ‐$ (13,480)$

Total Other Revenue and Operating Costs Reserve Adj (34,185)$ (3,040)$ (4,240)$ ‐$ (1,270)$ (25,635)$

Revenue Requirement Sub‐Total Before Indirect Allocations 196,749$ 43,641$ 43,934$ 2,004$ 9,134$ 98,036$ Direct Costs % 44% 45% 2% 9%

Indirect Costs Allocated Based on Direct Cost % 43,136 44,116 1,961 8,823 (98,036)

Revenue Requirement Sub‐Total Before RC Funding Requirement Adjustment 196,749$ 86,777$ 88,050$ 3,965$ 17,957$ ‐$ RC Funding Percentage 44% 45% 2% 9%

Reliability Coordinator Funding Requirement (17,957)$ ‐$ ‐$ ‐$ (17,957)$ ‐$

GMC Revenue Requirement 178,792$ 86,777$ 88,050$ 3,965$ ‐$ ‐$ Cost Category Percentages for GMC Rates 49% 49% 2%


GMC

Finance/FPP of 67

requirements to support generator only facilities is lower, it was determined the same operations and planning tasks are required

to ensure reliability throughout the interconnection footprint. In conclusion, CAISO determined that there is no separation of

duties between supporting a load serving entity and generator only entity that supports a change in the RC rate design.

Finance/FPP of 67

Supplemental Fees

As a final focus of the 2019 cost of service study, CAISO analyzed the efforts that support other

supplemental services. The effort required input from the various groups that support the services such as from

the Contracts, Contract and Model Implementation, Market Services, Operations Planning, Credit, and Customer

Service groups.

The study results indicate resources to process applications and statements has increased. These

supplemental fees are designed to help recoup some of the costs that a new, or additional, Scheduling

Coordinator (SC) or CRR customer has on systems and labor resources. While some of the costs are supported

through the volumetric charges of the GMC, these supplemental fees represent a portion of the resource impact

that any new entity, large or small, has. The CAISO is proposing to increase fees that have remained unchanged

for more than 10 years.

Conversely, the study has shown that resources to support TOR efforts have decreased due to

streamlined processes and automation. The decrease in costs and higher volumes support a decrease in the

TOR fee from $0.24 per MWh to $0.18 per MWh. CAISO does not propose any changes to other supplemental

fee amounts.

The revenue collected from the fees offset the costs recovered through either the GMC revenue

requirement or the GMC rates. The CAISO is not proposing any other change in supplemental fees.

Table 50– Summary of Supplemental Fee Changes

Fee Billing Units Current Fee Updated Fee

Bid Segment Fee per bid segment $ 0.0050 No Change

Inter SC Trade Fee per Inter SC Trade $ 1.0000 No Change

Scheduling Coordinator ID Fee per month $ 1,000 1,500$

TOR Fees

minimum of supply

or demand TOR

MWh $ 0.2400 $ 0.1800

CRR Bid Fee

number of

nominations and

bids $ 1.00 No Change

Intermittent Resource Forecasting Fee per MWh 0.1000$ No Change

Scheduling Coordinator Application Fee per application 5,000$ 7,500$

CRR Application Fee per application 1,000$ 5,000$

HANA Administrative Fee annual fee 45,000$ No Change

HANA Setup Fee one time fee 35,000$ No Change

Finance/FPP of 67

Transmission Ownership Rights

Transmission ownership rights (TOR) represent transmission capacity on facilities that are located within the

CAISO balancing authority area that are either wholly or partially owned by an entity that is not a participating

transmission owner.

The following four services are required for TOR:

1. Real Time Operations

CAISO provides support on an emergency basis for flows on TOR, in a manner similar to standby

service.

2. Scheduling

CAISO provides check-outs with neighboring balancing authorities (BA) in order to schedule flows

across boundaries.

3. Outage Management

CAISO provides for the scheduling and coordination of outages across the BA.

4. Settlements

CAISO utilizes its settlements system and processes to charge TOR fees.

Application of ABC to TOR Fee Structure

TORs utilize the ABC level 2 activities identified in the table below. These activities are all related to system

operations as there is no TOR participation in the market and thus market services costs are not applicable.

Finance/FPP of 67

Table 51 –ABC Direct Operating Activities for TORs

Mapping and Costing of Cost Categories to TOR Activities

Using the process described below, a total of $38.9 million in direct and indirect costs were allocated to

TORs. CAISO reached this conclusion by identifying the costs for the specific level 2 activities from the 2019 cost

of service update. The indirect dollars were then allocated based on the direct percentage. A table summarizing

the cost of TORs is as follows

ABC Code Task Code ABC Level 2 Activity

80004 301 Manage Full Network Model (FNM) Maintenance

80004 311 Manage Operations Planning

80004 312 Manage WECC Studies

80005 355 Manage Outages

80005 360 Real Time Operations

80005 362 Manage Operations Engineering Support

80007 411 Manage Market Clearing

80007 412 Manage Market Billing & Settlements

Transmission Ownership Rights (TOR) Fee

Finance/FPP of 67

Table 52 – Calculation of TOR Related Costs

System operation’s indirect costs were allocated based on the percentage of direct cost as shown above.

Then the ratio of TOR MWh to the total system operations (flow) MWh was calculated to determine the usage

percentage.

Calculation of TOR Costs

ABC Code Task Code ABC Level 2 Activity

Amount

($ in thousands)

80004 301 Manage Full Network Model (FNM) Maintenance 1,734$

80004 311 Manage Operations Planning 1,789$

80004 312 Manage WECC Studies 80$

80005 355 Manage Outages 1,535$

80005 360 Real Time Operations 10,444$

80005 362 Manage Operations Engineering Support 3,213$

80007 411 Manage Market Clearing 53$

80007 412 Manage Market Billing & Settlements 599$

Applicable Direct Costs 19,447$

Total System Operations Direct Costs 43,934$

Percentage of TORs to System Operations Direct Costs 44%

Total System Operations Indirect Costs 44,116$

Percentage Per Above 44%

Applicable Indirect Costs 19,411$

Total TOR Related Costs 38,858$


Finance/FPP of 67

Table 53 - TORs as a Percentage of Gross Volumes

The amount to collect is then derived by multiplying the TOR related costs by the TOR percentage

results. The TOR fee is then determined by dividing the TOR costs to collect by the minimum of actual TOR

supply or actual TOR demand for 2019. The revised TOR fee is as follows

Table 54 – Calculation of TOR Fee

TOR Flow

Volumes

(in MWh)

System Operations Volume 442,538,230

Add Back Grandfathered Contracts 3,723,000

TOR Supply 4,339,223

TOR Demand 4,313,917

Total Adjusted System Operations Volume 454,914,369

Total Gross TOR Volume (Supply and Demand) 8,653,140

TOR as a Percentage of Gross Volume 2.00%


TOR Fee Calculation

Amount

Total Applicable Direct and Indirect Costs 38,858,040$

TOR as a Percentage of Gross Volume 2.00%

TOR Costs to Collect 777,161$

TOR MWh for 2019 (min. of supply and demand) 4,313,917

TOR Fee per MWh 0.1800$


Finance/FPP of 67

Summary of TOR Fee Changes

Despite a decrease in the applicable TOR costs, the TOR related costs to collect increased by $157,549

from the last cost of service study due to TOR having a higher percentage of gross volume. However, the cost to

collect divided by the increased MWh resulted in a reduction of the TOR fee from $0.2400 per MWh to $0.1800

per MWh. CAISO proposes to decrease the TOR fee to $0.1800 per MWh effective January 1, 2021. The

revenue collected from the TOR fee will offset costs recovered through the System Operations charge rate.

Table 55 – Summary of TOR Fee Changes

Application Fees

The SC application fee is one of the original fees the CAISO has assessed since inception. The fee is

intended to cover the processing and setup costs for an applicant to become a certified scheduling coordinator

eligible to transact business directly with the CAISO. The fee amount was last changed in 2007. As part of the

2019 cost of service study, CAISO evaluated the actual cost of processing applications, establishing connectivity,

evaluating financial security, and providing training. When the hours to perform these functions per application

are applied against a general burden rate per hour the cost to process a SC application is $7,500.

The CRR application fee is assessed on any load serving entity (LSE) that desires to become a candidate

CRR Holder so that they can participate in the CRR allocation process to request CRRs. CRRs are important to

LSEs since they are a financial instrument used to offset congestion charges for the scheduled load in the day

2016 COSS 2019 COSS

Increase /

(Decrease)

From Prior

TOR Fee Calculation

Amount Amount Amount

Total Applicable Direct and Indirect Costs 61,961,200$ 38,858,040$ (23,103,160)$

TOR as a Percentage of Gross Volume 1.00% 2.00% 1.00%

TOR Costs to Collect 619,612$ 777,161$ 157,549$

TOR MWh for 2019 (min. of supply and demand) 2,627,260 4,313,917 1,686,657

TOR Fee per MWh 0.2400$ 0.1800$ (0.0600)$


Finance/FPP of 67

ahead market. These entities are allocated CRRs based on the load serving obligation of the LSE. The CRR

application fee was introduced in 2012; the fee amount has not changed since. As with the SC application fee,

CAISO evaluated the actual cost of processing applications, establishing connectivity, evaluating financial

security, and providing training. When the hours to perform these functions per application are applied against a

general burden rate per hour the cost to process a CRR application is $5,000.

CAISO proposes to increase the SC application fee to $7,500 and the CRR application fee to $5,000

effective January 1, 2021. The revenue collected from these fees will offset the annual GMC revenue

requirement.

Scheduling Coordinator ID Administrative Fee

The SCID administrative fee was originally designed to limit the number of SCIDs to those needed for

legitimate business purposes in order to reduce the additional burden on CAISO systems and resources that an

unlimited number of SCIDs could create. However, since the fee was last assessed in 2012, the cost to support

the settlements system and provide monthly statements and invoices has increased beyond the $1,000 per month

per SCID fee amount due to general inflation and system maintenance costs. In its evaluation, CAISO concluded

the SCID fee should increase to $1,500 per month to cover supporting system and labor costs from contributing

groups such as Contracts, Credit, Resource Management, SC Management, Market Quality, Settlement, and IT.

CAISO proposes to increase the SCID administrative fee to $1,500 effective January 1, 2021. The

revenue collected from the SCID fee will offset costs recovered through the Market Services charge rate.

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